In a digital world, trust is vital to win new discerning customers

In a digital world, trust is vital to win new discerning customers
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Interestingly, Asians are the most trusting of digital brands compared to other regions, despite many being more cautious about sharing their personal information.

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With the impact of COVID-19, many organisations find themselves reaching out to their consumers via virtual means. However, with consumers displaying varying levels of trust towards interacting with digital services, this could be a challenging task.

According to Okta’s study, The State of Digital Trust, 58% of Asian respondents would be unlikely to purchase a product from a digital brand they did not trust – with this figure rising to 73% in Singapore.

Compared to respondents from Australia, the US and the UK (77%, 75%, and 88% respectively), the response from Asian respondents is the lowest. This reflects the inherent need for organisations to create a stronger brand presence to establish greater digital trust amongst its customers to better engage them.

Moreover, cyber attackers are constantly looking to exploit platforms with more vulnerabilities. Now that organisations are developing their digital platforms, the potential for cyber attacks have also increased.

The responsibility then falls on organisations to ensure that whilst they move towards digital means of engagement that their customer data is secure – to cultivate the trust needed despite the increased attempts of cyber attackers.

What is digital trust

Digital trust is the foundation of the customer’s decision-making process – on digital platforms, customers are assessing the trustworthiness of a business before they even consider the products being offered.

Clarence Cheah, APAC Identity Lead of Okta shared that the importance of digital trust for a business has been exacerbated by the accelerated migration of customers to virtual platforms.

“In 2020, the Southeast Asian e-commerce market nearly doubled from USD $38 billion to USD $62 billion, with pandemic-related restrictions forcing millions to shop online for the first time ever,” said Cheah.

“With sales in the region projected to hit USD $172 billion by 2025, digital trust will be a make-or-break factor for businesses looking to acquire new customers and more importantly, foster brand loyalty in an increasingly competitive landscape.”

Consumer trust in Asia

In 2020, we saw the world entering a lockdown and people across the globe shifted to a remote working lifestyle, with customers spending more time and money online.

Cheah revealed that the Asia-Pacific surpassed the other regions when it comes to retail e-commerce during this period, with online sales growth nearly double that of the rest of the world.

“Looking at data from Singles’ Day 2020 specifically – one of the biggest milestone e-commerce events for the region – there were record spikes in online sales and traffic across Southeast Asia, with Malaysia seeing the highest increase in indexed sales at 600%,” added Cheah.

"These data point towards a stronger confidence in digital brands. Businesses should not take this increased confidence for granted however, as consumer loyalty is easy to lose. From our study, we learnt that half of Asian respondents have lost faith in a company due to a data breach or security event, with 38% permanently refraining from utilising the company’s services anymore, and deleting the app from their device.”

Regardless, Cheah attributes this increase in trust to the greater level of awareness and education amongst consumers as a result of a concerted effort from governments, organisations, and the media to educate the public.

By raising their level of awareness, this in turn contributes to a greater level of trust as consumers have become better equipped at discerning the platforms they frequent, and the risks they face across all digital touchpoints.

“Meanwhile, companies have taken steps to tackle the growth in cyber-threats facing their employees, especially in the remote working era. New security applications and technologies like multi-factor authentication (MFA) are the most popular measure, implemented by close to half (45%) of organisations in Asia followed by enhanced training for staff (32%). Both are vital in helping to drive the employee trust on which successful businesses are built,” adds Cheah.

For businesses, this means that the digital commerce space is set to be more competitive than ever, with brands – including digital-first brands and traditional businesses migrating to the digital space – all competing to get a slice of this lucrative pie. In such a cutthroat environment, losing trust would be detrimental to the health of a business.

- Clarence Cheah, APAC Identity Lead of Okta

Asians are more trusting towards digital channels

Based on the findings from the survey, Asians are the most trusting amongst the other regions despite 71% of Asian respondents being more cautious about sharing their personal information amidst the pandemic – almost double the global average (41%).

Cheah shared that the top reason given by Asian respondents for their increased caution online during the pandemic was media coverage about online threats (with 41% indicating as such), with similar findings in Australia and the US. Given the coverage, respondents would naturally be cautious knowing the threats out there – and thus, a greater level of scrutiny towards digital channels.

Nevertheless, businesses in Asia could have contributed greatly in assuaging the worries of their customers. Hence, the increased levels of trust towards digital channels compared to the other regions. 

“Meanwhile, the greater willingness of Asian respondents to purchase a product from a brand they don’t trust could stem from the differing stages of maturity in internet adoption, as well as differences in preferred platforms,” revealed Cheah.

“Many digital businesses we see today – think e-commerce apps, food delivery services and digital banks – were born in the smartphone era and designed to be mobile-first. 

“At the same time, Asia Pacific largely comprises developing countries – these are markets where most people had their first experience with the internet through mobile devices, completely leapfrogging the “desktop” phase. In fact, data from GlobalStats tells us that as of the beginning of 2021, 64.8% of the Internet traffic in Asia was coming from mobile devices – significantly higher than the corresponding figure in America (48.8%) and Oceania (53%).”

Given that Asian consumers were already exposed to e-commerce, financial service, delivery apps and many other digital businesses from their very first experience with the internet, Cheah believes that this could be a contributing factor to the greater willingness of Asians to transact online. 

Fostering stronger digital trust despite threats to data

To drive customer awareness and encourage better account profile and credential management, Cheah advises brands to follow a two-pronged approach.

  1. Ensure data security is fit-for-purpose with identity management

Organisations should start with enforce a best practice for identity management to drive effective security measures whereby they define the trust parameters by which employees, partners, and customers access sensitive data and systems.

One of which is offering multi-factor authentication (MFA) options to provide greater assurance to increasingly wary customers.

  1. Clear communications and education

Despite establishing a secure system, organisations would need to invest in clear communications and education to both customers employees and customers to foster greater security and trust amongst them. Otherwise, there could still be breaches as people could still contribute to security risks.

Importance of trust

Trust makes up the foundation for brand reputation, which directly affects the customer’s purchasing decision. As such, a lack of trust in a business would inevitably affect sales – a consequence that could have a detrimental effect on businesses.

“We already know that the accelerated e-commerce growth in Asia over the past year is forecast to sustain over the next 5 years – 94% of the new digital consumers from 2020 intend to continue with online services, even after the pandemic,” mentioned Cheah.

“For businesses, this means that the digital commerce space is set to be more competitive than ever, with brands – including digital-first brands and traditional businesses migrating to the digital space – all competing to get a slice of this lucrative pie. In such a cutthroat environment, losing trust would be detrimental to the health of a business.

“On the contrary, companies that go beyond the basics to delight their customers – by implementing seamless customer identity management, for instance – will be able strengthen their relations with their customers and potentially enjoy a greater share of wallet from them.”

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© iTnews Asia
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