What harms digital trust reputations for UK companies?

Digital trust is vital for the online reputation of small to midsize enterprises (SMEs) and can prove decisive in consumers’ purchasing decisions. Ensuring compliance with GDPR rules is essential to safeguard sensitive personal data, but there are also many other factors that affect digital trust in a company.  

It is important to understand how digital trust can be gained and lost and how to keep consumers confident in your services. However, what factors have an impact on online customer confidence in the UK?

To find out more about building digital trust, we surveyed 1,011 UK online consumers aged between 18 and 75. In doing so, we hoped to learn what elements affect digital trust and how companies can avoid losing consumer confidence.

In this first report in a two-part series, we’ve examined what influences the loss of digital trust for consumers. Our full methodology can be found at the end of this article.

Data protection perceptions are vital to customer experience

Consumer perceptions around when and how data is shared with companies can have a big impact on customer loyalty. To understand how this affects the public’s purchasing habits, we first investigated how our sample feels about the subject at large. 

It was clear immediately from the responses that data privacy is seen as crucial by UK online consumers in our sample. When asked, a combined 97% of our participants said data privacy was very (67%) or somewhat (30%) important to them. 

Not only this but a high level of confidence is needed before they’ll trust a potential online vendor. Around half (49%) of our sample expressed a need for 'a lot of trust' before sharing personal information with a company. 

However, it’s worth noting that 47% of this group said they would share information even if they didn’t trust the company provided a benefit was given. This broadly aligns with our First Party Data Survey findings in 2022, which discovered that participants would provide details like their name, email address, and occupation in exchange for incentives like vouchers, or to access services.  

What seems to matter more is how companies use that trust and whether they competently handle the responsibility for customers’ data. For example, when presented with the statement, 'the way a company treats my personal information reflects how they treat me as a customer', 91% of our sample agreed. 

As we can see from the findings, consumers regard their data privacy as a priority and many require a good deal of trust before they confidently share data. Therefore, it seems wise that companies should address quick ways to achieve trust when managing consumer data to avoid losing market share or customers.

Most UK online consumers are nervous about sharing personal data

We’ve already seen the bar for trust is very high for survey-takers sharing information online. Yet do consumers feel confident once they’ve decided to share their data with companies?

In general, the answer appeared to be no.

We observed 81% that agreed with the statement, 'I am nervous to share personal information with companies online’. When we asked this subgroup what made them nervous about sharing their data, the most common reasons were a lack of awareness of what their information will be used for and who would be given access to it.

Additionally, whilst most survey-takers (67%) said they felt companies were ‘somewhat transparent’ in explaining how they used personal information, many others (23%) felt businesses were not clear enough in this regard. Significantly the number of respondents expressing low confidence was much higher than the 11% who expressed trust in how companies explained their use of personal data. 

Given that we saw in our survey results that 47% check data reputations at least some of the time before making an online purchase, it is important for businesses to make sure they succeed in counteracting the doubts observed. Firms could do this, for example, by monitoring online mentions of their brand name to assess how their reputation is regarded by customers.   

Privacy policies matter, and consumers would like clearer information

One way that a company must comply with the UK’s Data Protection Act (sometimes known as UK GDPR) is to have a clear privacy policy. A company’s privacy policies may seem like something perfunctory, but they actually matter a lot more to customer trust than many may think.

It turns out most of our sample (82%) check privacy policies at least some of the time before making an online purchase. However, it is important to note that this includes 12% who said they always read the data privacy policies. This is a small but significant number and dispels the myth that consumers never read the ‘small print’. In fact, as we saw in our data, many claim they do.

Naturally, this has a lot of implications for how companies should approach the transparency and clarity of their data privacy policies. Unfortunately, the overall feeling of our sample at large is that companies weren’t reaching these goals.   

This lack of clarity should give businesses both big and small a cause for consideration. Not only can an unclear policy damage the public’s perception of a business, but it may also drive away sales too. This was reflected in our finding that 78% of the online consumers we surveyed said they would consider switching brands if a company’s data privacy policies were unclear.  

Consumers won’t just trust anyone with their sensitive data online and already feel nervous about sharing it with companies, as shown by our findings. Therefore, a lack of transparency and clarity from companies about their steps to protect that information could prove a much more important barrier to a purchase than many realise.

There are severe consequences if companies are seen to misuse data

We’ve already observed that online consumers in the UK have doubts about data transparency and concerns about how companies will protect their information. What remains unanswered is how consumers feel when data is taken and used improperly by firms; for example, when customer information is used for purposes they are unaware of through disclosures to a third party. 

Significantly, 56% of our sample said they would not continue shopping with any company that collected and sold their information. Only 11% said they would approve of this action.  

Furthermore, we saw a significant dislike for the trend of companies collecting more information than is necessary to facilitate the purchase of products and services successfully. 70% of our sample said they felt too much data was collected about them, and they didn’t like it.

These findings seem especially relevant in a scenario such as when a business wishes to sell data to another service provider for advertising offer purposes. As seen by our survey respondents, firms should remember to allow for opt-outs when such an action is taken, as a perceived link between data being used in a non-consensual way and unwanted outcomes (such as receiving spam messages) could greatly harm trust in a company.  

Generally, the sample was most comfortable sharing information when requesting more information about products and chatting with customer services. 

At the other end of the spectrum, automated processes such as talking to chatbots and using pop-ups and notifications created the biggest levels of discomfort. This could suggest that the human touch can add extra confidence to situations where more sensitive information needs to be shared.

Data leaks can wreak havoc on digital reputations

We’ve thus far examined the level of concern felt by the public, how much they trust businesses with their information, and how they regard the ways that companies request and use their data. Yet, what happens to digital trust when there is a breach of personal data and information gets leaked?

Cyber threats are an increasingly problematic reality of the online shopping experience. UK government estimates in 2022 showed that 39% of businesses had identified a cyberattack or cybersecurity breach over the previous 12 months.

There are many reasons that participants in our survey may be concerned about a data breach. We asked our respondents to highlight these points.

Several different concerns came across in our sample. The most prevalent of which was financial fraud, with 63% identifying it as their biggest concern. Additionally, some of the other key worries were an invasion of personal privacy if strangers had access to personal messages and photos (15%) and identity theft on social networking sites (14%). Only 4% had no concerns at all about data leaks.

It seems these fears could be based on experience too. In total, 51% of our sample reported falling victim to data loss in one form or another. The most common cause for this being as a result of an online scam, which affected 24% of this group. 

This group of 51% of consumers who had suffered a data misuse situation reported many reasons for their information being taken:

• 40% said they’d fallen victim to email phishing
• 23% said they weren’t aware of the cause
• 22% were scammed after entering personal data on a fake website
• 21% had entered their card details on a dodgy website
• 20% said they had been scammed whilst buying something on social media 

Most UK consumers would stop doing business with digitally insecure companies

As we’ve seen already, UK online consumers in our sample have well-founded concerns about trusting companies and other organisations with their data online. With just over half experiencing the negative consequences of data misuse.

Rather unsurprisingly, this was reflected In our results. We saw that 87% of participants said they would prefer to buy from companies with good reputations for protecting customer information. 

However, what was also clear from our findings was that the consequences for the digital reputations of companies after a data breach can be dire. A combined 70% expressed a view that they would stop doing business online with a company that is a victim of a data leak. 

However, businesses risk even more severe repercussions. When we queried our participants further about this negative feeling, over half (52%) expressed a view that they would consider legal action against companies that were victims of data leaks. Additionally, 7% of our sample said they had already filed a legal case against a business that had exposed their data via a leak.

Digital trust is easily lost and hard to regain

We can see that winning digital trust requires a delicate and proactive approach. Consumers are well aware of the risks of sharing information online and are naturally guarded as a result. Earning their trust is the ultimate goal and must be done properly to avoid losing business.

From our survey findings, we observed the following trends:  

• 49% said they need 'a lot of trust' to share information online, and 81% are nervous to share their data with companies
• 82% check companies’ privacy policies at least some of the time before making a purchase, and over half of the online consumers in our sample think privacy policies currently lack clarity
• 70% feel that too much data is collected on them online by companies, and they don’t like it
• 87% want to shop with companies that have good data protection reputations
• 70% would stop doing online business with companies that suffered from data leaks, and 52% would consider legal action against these firms 

In the second part of our look into building digital trust, we will examine the best practices that can help build a strong reputation for data handling. As we’ve seen in this analysis, there are many cautious consumers in the UK, so demonstrating the use of good information practice can prove critical.