Article

Risky business

The Deloitte Consumer Review

As consumers and businesses become more reliant on technology, how exposed are they to risk? In this edition of The Deloitte Consumer Review, we investigate consumer attitudes on issues such as data sharing, data collection and data misuse as well as the risks associated with digital transformation.

At a glance

  • 92% of consumers believe businesses should be held responsible for securing user data and personal information online.
  • 57% of consumers indicate that they would boycott companies that breach GDPR rules.
  • Nearly 60% of consumers would prefer that their data not be used to offer personalised recommendations based on their preferences and past behaviours.
  • 67% of consumers are concerned about brands having access to their data, up from 46% in 2015.

The state of the digital nation

The topic of digital risk continues to be an area of focus for businesses and consumers. The enforcement of GDPR (General Data Protection Regulation) on 25 May 2018 marks the biggest change in data privacy legislation in over 20 years and its introduction has shone a light on how businesses capture, store and use data. As a result, consumers are becoming increasingly aware and concerned regarding the use of their data therefore reassessing their attitudes towards sharing information with businesses.

Organisations undergoing extensive and strategic digital transformation in order to regain consumer trust open themselves up to risk, requiring new policies, governance and digital risk structures to ensure they remain resilient. Overall, society’s daily dependence on digital technology is exposing both consumers and business to risk in the form of:

  1. Digital transformation 
  2. Cyber security 
  3. Privacy and data protection
     

Key findings from the report

  • Most organisations are still unprepared to deal with different types of attacks and are at best aiming to mitigate the risk, rather than preventing attacks in the first instance.
  • A number of businesses do not have the right governance in place to safeguard their consumers, their employees and their brand.
  • Businesses are struggling to keep up with consumers as they increasingly adopt the latest digital technology. Perhaps most worrying is that governments and regulators have been the slowest to react, exposing both business and consumers to potential risk. 
  • There is growing belief among consumers that organisations should not just be responsible for providing security, but should be accountable for the impact of cybercrime with 81% expecting companies to provide consumers with the necessary tools for online data protection. 
  • As a result of GDPR, consumer awareness on data has reached a peak with more than 90% of consumers now aware that private and public sector bodies collect data about them and their activities. This has prompted many consumers to reassess their attitudes to sharing their data with businesses.

Rebuilding consumer trust

With fierce competition among consumer-facing businesses and given the level of mistrust, there are effective ways in which consumer trust can be restored:

  • Organisations must make consumer trust a priority. Businesses that embrace this challenge and show their consumers that they have their best interest at heart have the opportunity to build longer term loyalty.
  • Transparency over data collection and usage can only be viewed as positive as it raises the standards that organisations are held to.
  • With consumers more aware of the value of their data, we believe this will stimulate competition and allow for the production of innovative goods and services that make the best possible use of personal data.
     

What does Digital Risk mean for consumer businesses?

The rate of digital adoption varies with each organisation. As technology usage increases, so does the speed with which risk emerges. We explore strategic and agile ways in which businesses can identify, manage and mitigate risks. These include:

  • Implementing new control processes for new technology with clear documentation, assessment, testing and review. 
  • Adopting a flexible and consistent approach to identifying and managing risks posed by new digital technology such as AI and machine learning.
  • Ensuring that the benefits of a faster, more agile approach to digital transformation is balanced by equal consideration of the risks they introduce.
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