Governance, Risk & Compliance: GRC
Global Consumer Trust is on the Offensive, Survey Finds
Purpose-driven consumers skeptical of data privacy, food labeling and brands’ ethical stewardship represent US$1 trillion risk to businesses that are not prioritizing reputational trust and transparency-by-design.
- Global survey revealed two-thirds of consumers would trade-off a less expensive product for a brand with data privacy and quality assurance processes
- Global consumer trust when it comes to labeling is on the decline, with nearly half of those surveyed relying instead on peer reviews
- Consumers rated financial services data breaches and health & safety violations in groceries or restaurants among top concerns when considering a brands' trustworthiness
On the eve of the first anniversary of the European Union’s (EU) General Data Protection Regulation (GDPR), a new survey by SAI Global, a recognized leader in integrated risk management, reveals a growing trust deficit across global consumer groups driven by data privacy, traceability and ethical and environmental stewardship doubts.
Conducted by brand intelligence research firm Survata, the annual Reputation Trust Index report demonstrates that consumers are now beginning to rethink the value exchange terms between themselves and the brands they choose to do business with causing companies to go on a reputation offensive. Companies must begin thinking in terms of transparency-by-design to bridge the gap and safeguard brand resilience through trust-building. Companies can’t simply say ‘trust us’ when people are demanding ‘show us’.
Key survey findings include:
- 82% of consumers research companies before making purchases
- 65% of consumers ranked data privacy as the most important corporate social responsibility (CSR) value
- 36% of consumers ranked a Financial Service data breach as the most pressing company crisis, followed by health & safety violations in food manufacturing and retail
- 64% of consumers would spend more to save the environment
- 60% of consumers demand public responsibility more so than financial repercussions
Control, trust and transparency form the foundational basis for a healthy data economy. Of those surveyed for the Trust Index, 65% viewed data privacy as the most important attribute when considering a company’s trustworthiness, a score that indicates the rise in the understanding of global consumers rights and mechanisms that regulations like the GDPR have made available to strengthen their ability to manage and protect their data.
“GDPR, and a steady beat of high-profile data breaches, has shifted the way consumers think about their data and its value in our digital economy,” said Peter Granat, CEO at SAI Global. “The balance of power has tipped to consumers as reputations now hinge on trust and transparency credentials over cost.”
According to findings from SAI Global’s Trust Index, one of the most fundamental ways a company can prove its data collection and privacy processes “trustworthy” is by being transparent. Among those surveyed, 75 percent would accept a lower quality product for increased data protection. They would also pay more for a product or service if data privacy was guaranteed.
The annual survey also found no real differences in the value systems across generations. Among those surveyed, Millennials, GenXers and Baby Boomers all agreed that businesses must protect their privacy in order to gain their trust.
In the inaugural Trust Index report in 2017, SAI Global asked consumers to rank the more important attributes of trust and over half of consumers surveyed (56%) cited how the business responds in a crisis as paramount. Fast forward to 2019 and 60% of those surveyed now wanted companies to take public accountability and 24% want to see the company pay a fine.
“Businesses must have the proper controls in place for transparency across data privacy, supply chains and ethical stewardship or they risk losing consumer trust,” said Granat. “More than just mitigating risk, businesses must thoroughly integrate and align reputational resilience into their business strategy. By doing so they can gain a competitive advantage by becoming trusted providers in terms of safety, security, reliability, privacy, and data ethics.”
SAI Global commissioned Survata to conduct this survey on consumer trust. Survata interviewed 4,691 online respondents who were 18+ years old between Oct. 22-26, 2018. The study was sampled within six major global regions: Europe, Asia, North America, Middle East, Africa and the Oceania. The margin of error for this study at a 95% confidence level is 1.4%.
Download the Reputation Trust Index Executive Summary.