Why the Fourth Industrial Revolution will require a breakthrough in trust

How enterprises respond to threats can shape success in the digital economy.

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As the World Economic Forum in Davos concludes, thought leaders and pundits from around the globe will return home to manifest this years’ world economic forum theme – building a shared future in a fractured world. This year’s event focused on unlocking the potential of the digital economy in a world that is fractured both by geopolitical instability, and the distrust consumers and citizens have for the institutions in the new economy. 

Today between 50 percent and 71 percent of end users do not think that their online services provide adequate control over shared personal data. Another 57 percent felt that their data is being utilized without their explicit consent. Data breaches exposed sensitive user data in record numbers last year, with attacks in the U.S. alone increasing by nearly 30 percent in the first half of 2017. Recent studies by HSBC show that digital trust is eroding.

This opinion is not just shared by consumers, but by the cybersecurity professionals who are responsible for protecting user information. According to one study by McKinsey, the impact is so severe they estimate the dearth of trust will cost our economy trillions of dollars in future growth unless the institutions embracing digital transformation restore trusted relationships with consumers and citizens.

Trust is the lifeblood of the digital economy, and in the wake of so many high-profile data breaches, consumers are finding it increasingly difficult to believe in the trust and care that organizations are taking in protecting their identity information. When people don’t trust institutions in the economy, they participate less which can exacerbate an already fractured world.

Design trusted applications

For the majority of consumers, restoring trust starts with re-designing applications that power the digital economy. In the fourth industrial revolution, software is the point of sale, the point of customer value and delivers the frictionless experiences customers are demanding. 

More than any other technology, the software allows business leaders to be agile by retooling quickly and shape the behavior of consumers. Unfortunately, application vulnerability is a primary cyber threat vector. Seventy to 80 percent of most well-known breaches occur from exploiting a vulnerability in an application. In today’s app economy, where every company is using software to transform their business, the threat surface increases with every new app – both the apps that organizations create internally, procure externally and provide access to their customers.

How do you know that the apps you are developing or consuming are trusted? How do you know the duty of care that has been taken by the developers to identify and fix cybersecurity vulnerabilities within those apps? And what can you do when the companies publishing these apps hide behind the liability indemnification language in their end-user license agreements? And with more outsourced development, it’s even easier for an outside developer to include malicious code into an app they’re creating from open source libraries. Without application vulnerability security testing, the malicious code may not be detected for years, stealing data all along the way.

Create trusted experiences  

A recent study by Coleman Parkes demonstrated that companies that took an identity-centric approach to digital transformation had 52 percent greater results when correlated with business performance. The rationale is simple – “today technology enabled consumers have a say in what a company stands for. Enterprises must shift from a company-centric view to a customer-centric view that creates emotional brand experiences.”  (Forrester Brand Experience Playbook) For example, when a citizen interacts with the government, they don’t want a dozen different usernames and passwords for every agency they communicate with. Similarly, they don’t want a separate identity for all the services provided by their bank or retail organization. Having single identity not only makes it easy for agencies to offer transparency, manage consent and build more personalized experiences, but it also inspires the kind of trust that makes consumers raving fans. As an example, the State of Louisiana, faced with the need to modernize Medicaid enrollment, took a consumer-centric view and used the opportunity to design an inclusive system that would work for all citizen services rather than a single service.

Embrace standards and incentives to protect privacy

The examples of organizations around the globe making strides in digital trust, provide a survey of the approaches public sector and private organizations can take to build confidence in a fractured world. The World Economic Forum summarized the cause for trust and explained how companies could restore trust by providing greater transparency, creating standards and guidelines around personal privacy, supporting widespread use of disclosures, stimulating self-regulation and instead of punishment, providing incentives for businesses to promote end-user control of personal data.

What institutions have to realize is that trust is not a one-time event, you don’t own it, you lease it. Trust is earned in every transaction and every interaction, and like reputation, it is hard to earn and easy to lose. While there is no silver bullet, there is a steel thread of digital identity that connects the fabric of user experience. Creating trusted experiences and designing applications that provide a consumer and identity-centric view not only inspire trust but also offer economic reward. With both the public and private sectors reeling from devastating cyber attacks, how we confront and respond to the threats manifested from both internal and external actors in the year ahead could shape our reputations and determine our survival and success in the digital economy for years to come.

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