The 2023 Telesign Trust Index report shows how the alarming rise of digital fraud is jeopardizing customers’ trust that brands will protect their privacy. Digital trust is increasingly fragile. The report highlights consumers’ concerns about digital fraud, their expectations of companies, and the dire consequences for brands that fail to maintain consumer trust with a strong cybersecurity posture.
Preserving trust is the cornerstone of business success in today’s digital economy. The insights the Index delivers should alarm any business that’s discounting or de-emphasizing the value of a solid cybersecurity strategy to protect customer data. With the Trust Index projecting digital payment transactions to reach $2 billion in 2023 and $3.5 billion by 2027, businesses must confront the growing threat of cybercrime, including digital fraud.
VentureBeat recently interviewed Telesign CEO Joe Burton about the report’s findings. “Ninety-four percent of consumers said cyber-fraud is the brand’s, the company’s problem,” Burton said. “You not only need to protect them, but you’ve got to bring them on the journey and make them feel right. It’s an opportunity to actually deepen the brand relationship rather than lose it.”
He added: “A third of everybody we talked to admitted to being a victim. Well over half of the victims said they lost money, and a third of the victims said they lost more than $1,000.”
Closing the trust gap must be a high priority
PwC’s 2023 Trust Survey reinforces Burton’s insights. Nine in 10 executives say building and maintaining trust improves the bottom line, and 92% agree that enterprises are responsible for building trust. Yet PwC found a significant gap between how trustworthy executives think their company is and what customers believe. Eighty-four percent of business executives think customers highly trust their company, yet only 27% of customers say the same.
Closing that gap must start by prioritizing customer data security and privacy while delivering an intuitive experience in each app and platform.
Digital fraud widens the gap PwC found. And the 2023 Telesign Trust Index shows what happens when businesses do nothing to protect their customers.
Here are the Index’s key highlights, followed by a practical roadmap any business can take to preserve and grow trust:
Consumers overwhelmingly believe companies, not individuals, must protect their digital privacy. Ninety-four percent of consumers surveyed agreed that businesses bear responsibility for protecting consumers’ digital privacy. Consumers are seeing the scope and sophistication of digital fraud increasing quickly. Half of consumers polled were apprehensive regarding telephone and other forms of digital fraud, which they perceive as having increased significantly over the last two years. Nearly a quarter of consumers said they would prefer to be audited by the IRS, or to never eat chocolate again, than become a victim of digital fraud.
Consumers pay a high price both financially and psychologically for digital fraud. Thirty percent of consumers surveyed reported they had been victims of fraud in the past three years, and 61% reported financial losses, with a third of victims reporting losses of more than $1,000. Even more troubling is the emotional and psychological toll digital fraud inflicts on victims. Four in 10 cite mental health concerns, and 44% characterize the incident as having hurt them.
Breaches and data leaks quickly kill consumer loyalty and trust. A hefty 43% of data breach victims personally stopped associating with the brand altogether. Forty-four percent of consumers who were victims of a brand’s breach told friends and family not to associate with the brand. One in three victims shared the incident on social media, amplifying negative brand perceptions.
Building a practical roadmap
Telesign’s Trust Index suggests a practical roadmap is needed to prevent fraud, protect user data and privacy and maintain consumer trust. Maintaining trust requires company-wide cybersecurity and digital fraud prevention. Organizing strategies by the threats they address is the first step, shown in the following table:
Fighting digital fraud: A perfect use case for machine learning
Burton told VentureBeat, “Customers are okay with friction if they understand that it’s there to keep them safe. So the idea that you should never be asked for a password, never be asked for two-factor authentication, never be asked for more information — it’s all about how you do it that matters.”
Balancing increased cybersecurity with a more intuitive user experience is essential to building consumer trust. Instead of brute-forcing consumers to authenticate themselves with a series of questions many forget after first filling out a given application’s security parameters, Burton believes machine learning can assist in delivering a more intuitive, trust-generating experience. Many approaches to authentication assume a breach first and create roadblocks for consumers who just want to get logged in and transact business, get support or ask questions.
Burton said these experiences can be made more intuitive, and brands can get the login experience to be more secure and faster, by using a deep rich machine learning-driven digital identity system, such as Telesign’s. He said he’s seeing machine learning-driven digital identity systems helping to stop fake accounts, reduce onboarding issues, reduce the number of account takeovers and reduce promotion abuse. He credits his company’s use of machine learning as key to performing real-time risk-scoring that can identify malicious activity and alert threat analysts immediately so they can reduce the incidence of attacks in the future.
Cybersecurity is a business decision
Telesign’s Trust Index quantifies the downside of not respecting trust as a revenue and growth accelerator. Its cautionary findings show why having a practical roadmap to improve cybersecurity is essential to creating revenue now and in the future.
More CISOs are quantifying the impact of cybersecurity and zero-trust investments on revenue and profit growth — and seeing their contributions as increasing the possibility of promotion to board-level roles. CISOs who have been tentative about quantifying how their many initiatives and projects impact revenue should take Telesign’s report as a call to action. Reducing e-crime and fraud is a great place to start because it strikes at the center of their ability to deliver consistent, trusted experiences to consumers, the foundations of any business growth.
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