Dive Brief:
- Companies that build “digital trust” — or consumer confidence in their cybersecurity, data protection and use of artificial intelligence — are 1.6 times more likely than the global average to achieve at least 10% growth in revenue and EBIT, or earnings before interest and taxes, McKinsey said.
- “The companies that are good at building digital trust are also more likely to experience the best financial performance,” McKinsey Partner Jim Boehm said in a statement. “In a digitally connected and data-driven world, achieving digital trust is a major strategic imperative and a huge business differentiator.”
- “Digital trust” leaders set goals for reducing risk, such as stricter compliance with data protection and other regulation, and for generating value, such as using the most advanced artificial intelligence for decision-making and ensuring quick recovery from digital disruptions, McKinsey said in a study. Forty-nine percent of the leading companies suffered a data breach during the past three years compared with 57% of their competitors.
Dive Insight:
CFOs worldwide will spend $1.8 trillion this year on digital transformation of business practices and products, a 17.6% jump compared with last year, according to IDC.
The drive to adopt digital technology to improve customer experience and upgrade business efficiency and resilience will probably push up digital transformation budgets from 2021 through 2025 at a compound annual growth rate of 16.6%, IDC said. Spending will focus on manufacturing, supply chain management and back-office support and infrastructure.
As they increase spending, CFOs should focus on reinforcing the confidence of their consumers, Boehm said.
“Consumers are putting the safety of their digital identity in the hands of businesses they trust,” he said. “Companies with digital products and services should prioritize measures that help maintain consumer trust.”
Digital trust leaders are more likely to curb technology risks across 15 areas, including cybersecurity, configurations of cloud computing, technology service delivery, artificial intelligence use, data privacy, data quality and data retention, McKinsey said.
Forty percent of companies that cultivate digital trust faced a setback in the use of artificial intelligence during the past three years compared with more than half (53%) of their competitors, McKinsey said, citing a global survey across 27 countries of 1,300 senior executives, including 430 CEOs.
Consumers want openness about companies’ digital policies, McKinsey said. More than four out of five consumers (85%) said they want knowledge of a company’s data privacy policies before buying its product, McKinsey said. Seventy-two percent want to know details of how a company uses artificial intelligence.
Nearly half of consumers (46%) want clarity on how a company will use their data, and 53% will only purchase products from companies that are known for protecting consumer data, McKinsey said, citing a survey of 3,073 adults in the same 27 countries, weighted to the countries’ populations, ages and gender.
The countries involved in the survey include Australia, Brazil, Germany, India, Indonesia, the U.K. and the U.S.
