By Kirsten Doyle
Customers in every sector, from banking and healthcare to retail and hospitality, are increasingly cautious about sharing their personal information online. Recent research delved into consumer attitudes towards data sharing across various industries, offering insights into the sectors that inspire the most trust and those with room for improvement.
At the summit of trust, industries like banking, healthcare, and government services, with 44%, 41%, and 37% of respondents, respectively, expressed comfort in sharing their data with them. Interestingly, two years ago, governments were named one of the least trusted sectors, with a mere 14%, leading us to believe that government leaders are recognizing data’s importance in improving service delivery and are learning how to balance the benefits with the dangers.
Taking Proactive Measures
These trusted sectors have one thing in common: they deal with sensitive information and are subject to stringent regulations to safeguard consumer data. For instance, in Europe, banking operations adhere to directives like the Second Payment Services Directive (PSD2), the General Data Protection Regulation (GDPR), the Digital Operational Resilience Act (DORA), and the Network and Information Security Directive (NIS2) which fosters competition and innovation and prioritizes the security of online transactions.
PSD2 is a testament to the proactive measures undertaken by highly regulated industries to strengthen data security. Mandates such as Strong Customer Authentication (SCA) demonstrate a commitment to protecting consumer interests and building trust. Moreover, ongoing developments like PSD3 highlight a continuous effort to adapt to evolving digital landscapes, further boosting consumer rights and data protection.
Consumer trust in banking is notably higher in regions with robust data protection regulations, such as Europe (44%), compared to jurisdictions with less centralized frameworks, such as the US (35%). This emphasizes the critical role that regulatory frameworks play in shaping consumer perceptions of data security across different sectors.
Not All Industries Are Equal
The research showed that not all industries enjoy the same level of trust. Sectors like retail, hospitality, media and entertainment, and social media companies need to catch up, with single-digit percentages of consumers comfortable sharing their personal data. These industries could benefit from emulating the best practices adopted by their more trusted counterparts.
For sectors lower down the trust ladder, embracing the principles of transparency, accountability, and proactive data security measures is key. Drawing inspiration from banking and healthcare, they can implement robust security protocols, prioritize consumer consent, and streamline regulatory compliance processes. By doing so, they can instill confidence in consumers and cultivate long-term relationships built on trust.
There are other ways less trusted sectors can build trust among consumers. For instance, they should view transparency and accountability as being inseparable. Sectors with lower trust levels can mirror the accountability structures seen in banking and healthcare by designating specific individuals or teams responsible for data security.
Ensuring Compliance
Regular internal and external audits can ensure compliance with data protection laws and pinpoint potential vulnerabilities. Establishing protocols for promptly and transparently addressing data breaches is another way these industries can demonstrate their dedication to accountability and consumer privacy.
In addition, instead of reacting to security threats, lagging industries can proactively deploy robust security measures. Inspired by multifactor authentication systems mandated by regulations like PSD2 in banking, these industries can adopt advanced encryption techniques, access controls, and intrusion detection systems to protect their customer’s data.
They could also establish a privacy practice and appoint dedicated compliance officers to build a regulatory awareness and adherence culture throughout the business. By keeping abreast of regulatory changes and implementing necessary adjustments, less trusted industries can demonstrate a commitment to regulatory compliance and consumer protection.
In addition, staff training is crucial for any well-functioning business, as it equips employees with the necessary knowledge and skills to adhere to legal and ethical standards. Empowering employees to understand compliance brings benefits beyond a mere checklist to respecting their organization and its customers. Deploying the right set of data protection tools also helps avoid any insider threats to consumer data.
The Importance of Consent
Importantly, emphasizing consumer consent is crucial for fostering trust and respecting customers’ data rights. Social media, logistics, and retail sectors can emulate the stringent consent requirements seen in financial services and healthcare to enhance trust.
Businesses can empower consumers and enhance transparency by implementing clear opt-in/opt-out mechanisms, offering granular control over data-sharing preferences, and obtaining explicit consent for data processing activities. They should also ensure that their consent mechanisms are easily accessible, user-friendly, and regularly updated to align with evolving regulations, which is essential.
Here, implementing a CIAM solution could help improve customer consent management and enhance their overall experience by offering streamlined and transparent control over their personal data.
Security is Fundamental to Loyalty
In a landscape dominated by data breaches and privacy concerns, organizations must prioritize data security and privacy as fundamental to their operations, going beyond compliance with international data privacy laws to actively cultivate consumer trust and loyalty.
Implementing enhanced customer protection measures strengthens data security and empowers consumers with greater control over their personal information, fostering stronger relationships.
To navigate evolving consumer expectations and regulatory dynamics, organizations that are less trusted by consumers must remain agile, invest in robust data security and privacy infrastructure, stay updated on emerging threats, and continually refine privacy practices to earn and uphold consumer loyalty in the digital era.
Kirsten Doyle has been in the technology journalism and editing space for nearly 24 years, during which time she has developed a great love for all aspects of technology, as well as words themselves. Her experience spans B2B tech, with a lot of focus on cybersecurity, cloud, enterprise, digital transformation, and data centre. Her specialties are in news, thought leadership, features, white papers, and PR writing, and she is an experienced editor for both print and online publications. She is also a regular writer at Bora