Flawed operational trust can show up in a variety of ways, from a debate on racial bias in artificial intelligence (AI) to an online survey (capturing nearly 5,000 different data points) that targeted users with political propaganda without their knowledge or consent.
Examples like the ones mentioned above have created an association of trust and data with risks and negative implications, for example:
- Fake news: 76% of people said they worry about false information and fake videos “being used as a weapon,” according to the 2020 Edelman Trust Barometer.
- Data breaches: Cost of data breaches is estimated to hit US$5 trillion by 2024, according to Juniper Research.
- Data privacy: 75% of people say they won’t buy from a company they don’t trust to protect their data.
However, if we rotate our approach and think about the availability of trust (vs. the lack of it), then we can explore new frontiers of value.
Are organizations ready to adopt this new perspective of trust and focus on its importance for business? What are the key questions boardrooms and business leaders need to ask themselves? Is there an upside to trust? Let me share some of my thoughts on these questions.
Why trust matters in business
Trust is a hot topic in business and academic communities but defining it can be difficult and controversial.
One of the well-known measures of public trust is the annual Edelman Trust Barometer. This defines trust as whether business, the media, governments and non-governmental organizations (NGOs) “do the right thing” and how competent they are.
In the 2020 Edelman Trust Barometer, business ranks the highest in competence, NGOs as the most ethical. What strikes me from this data is that no institution is seen as both ethical and competent.
Looking at consumer beliefs, it is becoming apparent that as new, intelligent technologies based on artificial intelligence and machine learning reshape our lives, concerns are growing. This strongly confirms the magnitude of a “trust gap.” The 2020 Edelman Trust Barometer reveals there’s a gap between what technology is capable of and what people trust it to do, with 61% believing the pace of technology is too fast, and 66% worrying that they can no longer discern if what they’re seeing and hearing is real.
Of equal relevance is that 61% believe regulators don’t understand the new challenge well enough to regulate it effectively. In my own opinion, regulators cannot operate at the speed required to cope with the rhythm of ongoing technology evolution and will likely keep finding themselves in “catch-up” mode.
People are increasingly unwilling to make a trade-off between the power of what technology can achieve and control over the outcomes of those technologies. This, coupled with a lack of timely and globally consistent regulation, translates into a major challenge for businesses.
Given these trust gaps, how can a business remain credible with its customers and within its ecosystem? How can it innovate without the constant fear of breaking (ever-evolving) rules?
So, how can business leaders address trust gaps in data and technology?
To address the perceived challenge of markets evolving too fast without enough control, boardrooms and business leaders need to establish if their data, technologies and automated processes are trusted – internally, with customers and across the ecosystems they operate in.
Trust gaps matter because businesses are complex organisms that operate in complex ecosystems, and deal with demanding markets. Therefore, you are only as strong as the weakest link of your value chain. Trust gaps can accumulate, often unseen, until the damage is done.
Trust gaps act like speed bumps on the road to innovation. They often interfere with an organization’s ability to transform into an intelligent enterprise. But companies cannot rely on others to solve their trust gaps. They must smooth the road themselves by building trust into the design of their business models; by using human governance alongside artificial intelligence (AI) and machine learning to oversee their algorithms; by embedding trust in their data as it flows through its journey to value creation.
Closing an organization’s trust gaps will ultimately accelerate the path to growth and success. Let me quickly highlight why.
What’s the upside to trust?
According to a recent EY study, shifting trust dynamicswillprompt the movement of US$11.3t in financial assets to more trusted institutions during the next five years. Well, I think this is indeed a big move.
There are many upsides to trust. Trust is a business driver that enables a company’s reputation, its reliability within the ecosystem and compliance with regulatory requirements. Within a business, trust is an accelerator of agility, innovation and growth.
There are also widespread benefits to people when working in a trusted environment: people at high-trust companies report 74% less stress, 106% more energy at work, 50% higher productivity, according to the Harvard Business Review.
So how can you create trust in your data and across the business? Ultimately, your organization, employees, customers, business partners, they all need to know that they can rely on the data flowing through your enterprise to build trusted intelligence, deliver the right outcomes to all your stakeholders and build competitive advantage. And the regulators will be happy, too.
Trust sits at the very heart of this equation. Trust and value are inextricably linked, so if you want to create more value, build more trust.
The views reflected in this article are those of the author and do not necessarily reflect the views of the members of the global EY organization or its member firms.
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