As the world continues to do more and more business virtually, digital trust is becoming a critical issue for an ever-expanding list of companies. Any business that collects personal information from customers online must assure them that their information is safe and secure.
To protect our critical information, there are a growing number of tech companies whose focus is digital trust, including a number of publicly traded companies. Retail shareholders have a number of options when it comes to investing in digital trust. Some of the options for individual investors come in the form of legacy technology companies such as Microsoft (Tii:MSFT) while a number of new companies have popped up in the digital trust market.
Why does digital trust matter? Though people may still use a website or platform they don’t trust, they’re much less likely to make it a mainstay of their online experience or to recommend it to friends and family. The more a consumer trusts a site, the more they use it. The opposite is also true: The less a user trusts a site, the less they will be willing to hand off sensitive information or purchase items.
Digital trust is the confidence users have in a given website, app, or technology to provide security, privacy, and good ethics along with their services. Like any form of trust, digital trust is earned. If a user is burned by a tech company when it comes to digital trust, it is very difficult for them to earn it back. Likewise, a positive digital trust experience will create trust and goodwill.
Some of the biggest tech companies face a user trust problem. According to the Washington Post, 72% of Facebook (Tii:META) users don’t trust the website to handle their sensitive data responsibly, with other tech giants like TikTok and Instagram not faring much better at about 60% user distrust. A recent survey from McKinsey on digital trust shows that 85% of respondents say that knowing a company’s data privacy policy is important before making a purchase and 72% said knowing a company’s AI policies is important before making a purchase.
Creating digital trust helps both the companies investing in it and the consumers protected by it. In 2022, NASDAQ listed companies that may not have addressed digital trust at the CEO and Board level, lost over $1.4 trillion due to data privacy, according to a report by The Conference Board.
Every company operating online is involved in digital trust in some way. And tech companies that rely on digital trust are beginning to police themselves. The Digital Trust & Safety Partnership formed in 2021, with Facebook, Google (Tii:GOOGL), Microsoft, Twitter, Discord, Pinterest (Tii:PINS), Reddit, Shopify (Tii:SHOP) and Vimeo (Tii:VMEO) listed as its members, with the goal of developing a best practices framework for handling harmful content and behavior online.
While none of these companies are focused entirely on digital trust, their success or failure handling it will determine their long-term performance.
Many startup companies like Xage Security are helping their customers boost digital trust, but none are them are publicly traded — at least not yet. DocuSign (Tii:DOCU) is one of the few publicly traded companies that is focused entirely on digital trust. The company allows organizations to safely manage electronic agreements and safely sign important documents online.
Technology is expected to help boost digital trust. Blockchain can help with trusted identities. Blockchain, best known as the digital backbone of cryptocurrency, can verify credentials without revealing details behind that identity and enables decentralized, tamper-proof self-sovereign identities, which can be used for various commercial and government services. Quantum computing technologies will likely impact digital trust as well. Quantum technologies can perform vast analytics on cyber and privacy data to detect anomalous or suspicious behavior.