By Manish Bahl, Senior Director, Center for the Future of Work, Cognizant
Let’s face it — as consumers, we don’t really think too hard about data security until something goes wrong. Despite the security risks, we happily go on sharing data online, downloading apps, uploading images, following free sites, and storing valuable documents in the cloud; this is because we prefer to focus on the benefits of such actions rather than the dangers involved. There is a widespread assumption that firms will leverage our personal data to provide highly tailored experiences that make us feel special. In fact, data is one of the intangible assets that account for as much as 84% of the market value of the organizations listed on the S&P 500 index.
However, this era of extreme personalization has a dark side, in that we are more vulnerable than ever to online fraud or theft and data breaches. The recent ransomware attack, WannaCry, demonstrated that cyber security threats have already surpassed organizations’ capacity. The shocking reality is that 49% of businesses fell victim to cyber-based ransom attacks in 2016, and the costs of redressing cybercrime damage are set to hit a jaw-dropping $6 trillion per annum by 2021.
In today’s ever more connected world, our data footprint is getting larger and larger; everything from wearables to home appliances, smartphones, and cars can now be synced. While this is a fantastic development, it means that a single security breach on one device can infect an entire network, as multiple devices are often interconnected on a home or business network. We have already seen reports of cyber-attacks launched through connected refrigerators and malicious e-mails sent via other household appliances. Even connected toys are not safe; a Chinese toy manufacturer recently admitted that the security of 6.4 million kids had been compromised by a massive data breach.
Data Breach Can Tarnish Brand Value
As the IoT becomes ever more defined, it will be increasingly critical to win consumers’ trust; however, such a process will also become harder. This is illustrated by the fact that in a recent survey, 57% of Asia Pacific-based consumers said they would completely turn their back on a company if they were to suffer any breach of their data. Even worse, one-third of all consumers (or their family or friends) have reported that their personal data (credit card, bank details, health information, and so on) had been stolen or compromised in the last two years. A UK-centered telecom operator revealed that 157,000 of its customers’ personal details were targeted. Since October 2015, the firm’s share price has fallen by 27%, while it has seen a 4.4% drop in its market share of new customers in its home services segment.
The impact of broken trust can be highly insidious; Forbes Insights noted that 46% of the organizations it surveyed had lost face in the eyes of the public, and had their brand value tarnished, due to a data breach. While it takes many years to gain customer trust and establish brand loyalty, it can all be obliterated in just one day, especially in the age of viral social media sharing.
The depressing truth is that no single industry enjoys a high level of trust. Only 43% of consumers surveyed have utmost faith in companies and almost 40% are planning to switch to a rival firm or a digital startup as a result of trust issues. The question is how can businesses turn this situation around and make trust their greatest asset? Below are three key ways in which companies can win in the digital economy:
Add Big Data and Artificial Intelligence as the New Tools of Trust.
When it comes to security, too many organizations seem to adopt a reactive, rather than proactive, approach. According to our latest research, Asia-Pacific leaders trail behind their global competitors in prioritizing cyber security. Just how much is at risk in this situation? It is estimated that cyber-attacks will cost businesses as much as US$400 billion per annum through 2021. To put things in perspective, that’s more than the GDP of roughly 160 of the 196 countries in the world.
Compounding the problem is the fact that our current computational infrastructure is inadequate. As more and more parts of our lives are conducted online, security threats will only become heightened. What we need is a software infrastructure that can be mathematically proven to give a greater level of security and bring the ability to identify suspicious patterns before they can do any damage (it must be remembered that there is no such thing as 100% security). AI and big data will complement each other and become the new face of consumer trust for organizations. In the same way that smartphones have become an extension of our persona, intelligent machines will grow from this new ethos of cyber security.
Cyber Security Must Become a Boardroom Topic
With so much at stake, companies can’t afford to take their foot off the pedal in matters of security. It is essential that cyber security becomes a top agenda point for boardroom discussions, so that concrete decisions can be made. Trust itself must become a boardroom issue, as it has a direct correlation with bottom-line benefits. It needs to be addressed throughout the hierarchy of the organization and every employee should feel empowered to build trust when interacting with customers. It is only by making consumer trust a business KPI metric that is capable of being measured can it become a viable asset that adds value to a firm.
Be Quick to Respond to Failures
It doesn’t matter if a company has a world-beating technology infrastructure; history shows us that it cannot definitively promise its customers that nothing bad will happen to their digital information. To win, organizations need to recognize, understand, and proactively manage potential issues as they are spotted. For instance, after a recent cyber-attack, Vodafone was quick to notify customers and financial institutions of the incident, minimizing the damage to its trust levels.
As the digital economy continues to rapidly expand, there is no question that we will hear of more businesses suffering financial and image losses due to failures and abuses of security and, consequently, trust. Forget the competition, these days one of the most significant threats to companies comes from within; namely, the need to win and retain consumer trust. Consumers do not just expect that businesses will put their interests ahead of everything else; they demand it. If they feel that their trust levels are taking a hit, more likely than not they will move on to another brand. As firms rely on consumers to demonstrate the quality of their brands, a loss of trust can be perilous for both the brand and the company’s very future. To make sure that trust is maintained at every touch-point along the customer’s journey, it is vital that senior executives ensure their companies are equipped with the right leadership, culture, organizational design, operating model, skills, technology, and processes.
Those companies that view trust not just as a security or technology issue, but also a brand-building opportunity, and put their consumers’ interests ahead of short-term profits, will be those that are most qualified to come out on top when trust problems disrupt their business. In the months and years to come, trust will increasingly be seen not as the end objective, but as a necessity for cyber security.
Manish Bahl is one the key speakers at Cyber Security Asia. He will be delivering a talk on “Trust is the New Ethical Battleground to Win the Digital Wars”.