Asia Business Channel

Microsoft Special Report - Only 31% of consumers in Asia Pacific trust organizations to protect their personal data

 

Summary

Nearly 40% of consumers in the region have had their trust compromised when using digital services; Only 5% of consumers prefer to transact with an organization that offers a cheaper but less trusted digital platform; Consumers have the highest expectations of trust from financial services, healthcare and education sectors; Consumers feel that governments followed by technology companies should take the lead in building trust.

The Report

Highlighting a strong need to build trust in the region, a study from Microsoft and IDC Asia/Pacific, Understanding Consumer Trust in Digital Services in Asia Pacific [1] revealed that less than one-third (31%) of consumers believed that their personal data will be treated in a trustworthy manner by organizations offering digital services.

Today, almost all transactions and interactions in Asia Pacific, from organizations and government agencies, to banks and retailers, are becoming digital. At the same time, consumers are becoming more aware of the cybersecurity risks and the risks to the privacy of their personal data, not just from cybercriminals but also from organizations holding on to their personal data.

The study aims to understand consumers’ expectations of trust, uncover their experiences with digital services and provide tangible insights to organizations to help bridge the gap by earning and sustaining the trust of consumers in the digital world.

“The upside for organizations with a trusted digital platform is tremendous as Asia Pacific is one of the most digitally active regions globally and almost all of the transactions and interactions here would be digital in the near future,” said Antony Cook, Associate General Counsel, Corporate External and Legal Affairs, Microsoft Asia.

“However, despite consumers’ increasing reliance on digital services, there is still a considerable trust gap that needs to be addressed. Most consumers still do not perceive organizations to be trusted data stewards. I urge business leaders to do more to understand what drives consumer trust and focus on how they can build trust and make it a key competitive advantage for their digital services,” Cook added.

The study, which surveyed 6,372 consumers across 14 markets in Asia Pacific, asked respondents to provide their opinions on the five elements of trust jointly defined by IDC and Microsoft – namely privacy, security, reliability, ethics, and compliance [2] – when using digital services.

The study revealed that consumers feel that all five elements of trust are almost equally important to them. Specifically, security (88%), privacy (87%) and reliability (84%) emerged as the top three most important elements. Consumers also have the highest expectations of trust from financial services institutions, followed by healthcare organizations and education institutions.

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Fig 1: The importance of the five trust elements, according to consumers in Asia Pacific

Trust in Digital Services is Fragile

As organizations in Asia Pacific continue to transform their business models, offerings and customer engagement strategies, the range of digital services available to consumers continues to grow in number and variety.

The study found that establishing a trusted platform needs to be a priority in organizations’ strategy for digital services as only 5% of consumers prefer to transact with an organization that offers a cheaper but less trusted digital platform. Additionally, 61% of consumers highlighted that they would recommend a trusted digital service to others even if the cost is higher.

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Fig 2: Percentage of consumers who would recommend a trusted digital platform to others even if the cost is higher

“Trust is critical for organizations to succeed in this digital world as consumers overwhelmingly prefer to transact with organizations with a trusted digital platform,” said Simon Piff, Vice President of Security Practice, IDC Asia/Pacific. “As competition between digital services becomes more intense and global in nature, advocacy through word of mouth can be a strong differentiator for the organization and a shot in the arm for the brand.”

Despite this, the study uncovered that nearly 40% of consumers have had their trust compromised when using digital services. The top three trust elements that caused consumers to stop using digital services are security, reliability, and privacy.

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Fig 3: The top three trust elements that caused consumers to stop using digital services are Security; Reliability; and Privacy.

It is also interesting to note that the digital natives Gen Z (48%) and Gen Y (45%) had had more negative trust-related experiences compared to Gen X (37%) and Baby Boomers (31%). More importantly, the study established that consumers will take action if they have a negative trust experience. More than half (53%) of the respondents would either switch to another organization, reduce the usage (36%) of the digital service or stop using (34%) the digital service altogether.

Impact of Artificial Intelligence on Consumers’ Future

Artificial Intelligence (AI) is the defining technology of our generation that will become the center of our digital world. When harnessed properly, AI can solve our biggest problems – from finding the cure to diseases to creating a more sustainable world.

Although the adoption of AI is still in its nascent stages, most consumers (92%) in Asia Pacific are aware of AI and nearly half of the respondents (49%) are optimistic about the future of AI. Consumers are also generally optimistic about the impact of AI on their jobs where three-quarters (75%) of them believe that the impact will be positive.

Building Trust in Artificial Intelligence and Digital Services

As technology continues to transform how we live, work and play, all organizations providing digital services and harnessing the capabilities of AI should be responsible for fulfilling the five elements of trust with their customers directly.

However, the responsibility of building trust should not just be on the shoulders of these organizations providing digital services but also the broader industry, including government institutions and technology companies.

The study showed that consumers in Asia Pacific feel that the government (43%) should take the lead in building trust, followed by technology companies (35%), indicating the need for a stronger partnership between the private and public sector.

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Fig 4: Consumers’ opinion on who should take the lead in establishing trust, besides organizations providing digital services

Interestingly, a significantly higher percentage of consumers from Gen X (47%) and Baby Boomers (48%) feel that the government should take the lead in establishing trust in digital services, compared to Gen Z (36%) and Gen Y (39%). Furthermore, the Gen Z feels that technology companies, more than the government, should take the lead in building trust.

When it comes to fostering trust in AI technologies, consumers feel that the government (46%) and technology companies (32%) should take the lead in ensuring AI is used in a trusted manner.

“To establish a trusted framework for the development and usage of AI and technology in general, we must first consider its impact on individuals, businesses and society. This would require a broader debate that involves the appropriate stakeholders, including the government and technology companies. These dialogues would need to be backed by actions, including forging closer partnerships and facilitating greater knowledge exchange. These are all necessary steps that will enable us to collectively establish a well-balanced, holistic baseline for trust for the entire industry,” Cook concluded.

[1] About the Microsoft-IDC Study: Understanding Consumer Trust in Digital Services in Asia Pacific:

• 6,372 consumers across Asia Pacific participated in this study.

• An equal ratio of males and females were surveyed.

• Consumers were from four different age groups: Gen Z – 15 years old to 25 years old (20%); Gen Y – 26 years old to 40 years old (30%); Gen X – 41 years old to 55 years old (30%); and Baby Boomers – 56 years old to 75 years old (20%).

• All respondents come from a broad spectrum of occupations, from management, professions to students and homemakers.

• 14 Asia Pacific markets were involved: Australia, China, Hong Kong, Indonesia, India, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam.

• An important qualifier for the Study is that these consumers need to be digitally active in their daily lives, where they regularly perform online activities such as banking, shopping and have had social media engagements in last 90 days.

[2] Definition of the five trust elements provided to the study’s respondents:

• Privacy: the organization providing digital services takes appropriate steps to ensure my personal information is always secure;

• Security: the organization providing digital services takes all steps to keep my personal information private and used only for the purposes which I approve;

• Reliability: the organization providing digital services maintains its product and services to work consistently and with minimal disruption;

• Ethics: the organization providing digital services uses the data it collects from me in an ethical manner based on standards of honesty, fairness and inclusiveness;

• Compliance: the organization providing digital services ensures that the products and services I use adhere to established industry and statutory regulations.

 

 

 

 

  Editors Note:
  Microsoft Asia Pacific provided this article. For more information on Microsoft’s activities in the Asia Pacific area      and to access information on their products and research visit them on the web                                                          at: https://news.microsoft.com/apac/

 

 

 

 

 

 

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