Trust: An Obstacle and an Opportunity for Digital Transformation
Low trust, in short, is an obstacle to digital transformation
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But trust is also critical to allowing the process of digital transformation to occur in the first place, and Latin America, the least trusting region in the world, is notably behind global leaders in taking advantage of digital technologies to modernize government and business.
Low trust, in short, is an obstacle to digital transformation. It is also a problem that digital transformation can help overcome.
We delve into this conundrum in a chapter of the recently-published Development in the Americas report on trust. Here’s what we found.
Low-trust People Use Digital Services Less
Using digital services requires leaps of faith. Users must believe that the good or service will be delivered as promised, even though in many cases they cannot actually see what they are purchasing. They often must pay up front, requiring them to trust providers to fulfill their commitment (e.g., to send a product in the mail). Furthermore, they have to trust that providers will be responsible stewards of the personal data they provide. It is perhaps intuitive, then, that low-trust people, who make up the majority of Latin Americans, would be reticent to use digital services. This is precisely what the data show.
There’s another rub: many Latin Americans value inefficiency. Sixty-two percent of citizens in seven Latin American countries believe that barriers to access have to be high (lots of requirements, complex forms) in order to prevent fraud in service delivery. Digital services naturally have lower barriers to access than equivalent in-person services, which low-trust people may perceive as making them more vulnerable to fraud.
Roots of Mistrust Online: Privacy Concerns and Poor User Experience
Mistrust fuels reluctance to use digital services in Latin America and the Caribbean and part of the reason seems to lie in a disconnect between what people say, and what people do.
On one hand, Latin Americans overwhelmingly state in surveys that they trust neither public institutions nor private companies to treat their personal data responsibly. On the other, they are avid users of services that are based on the aggressive usage of personal data, such as those of Facebook and Google. If privacy concerns were really so important, these companies’ business model—known as surveillance capitalism—simply wouldn’t work.
So, then, what is driving low uptake of digital services? Consider your own experiences. If you go online with your bank, attempt to transfer money between accounts, and the website freezes, would you try a second time? If you try to access a digital public service, and the forms don’t fit on your smartphone, would you think about going to an office instead? This is precisely what happens to many Latin Americans: In a 2020 survey, nearly half of users of digital public services reported having difficult experiences.
Whether or not citizens’ doubts about privacy are backed by their behavior, Latin Americans generally should be concerned about trust online. This is because the invisible foundations of digital security—data protection and cybersecurity—are weak in most countries.
Data protection: As of late 2020, 14 out of 26 countries in the region had no data protection laws in effect. Even in the 12 of 26 countries that do have a legal framework for data protection, the laws are often outdated or insufficient to grapple with the complex situations that the digital economy presents. In only nine of the 12 countries with laws is there any implementation capacity.
Cybersecurity: Out of 32 countries in the region, 25 do not have a critical infrastructure protection plan, 12 lack cybersecurity incident response teams, 20 do not have a national cybersecurity strategy, and 22 do not have a government entity in charge of national cybersecurity management. There are sitting ducks everywhere.
There are some concrete actions that can help the online environment be (and seem) more trustworthy, and thus boost uptake of digital services:
- Start with user needs. Digital services must be designed with users in mind, iteratively testing and modifying, striving for the user experience of all services to be on par with those of the digital giants.
- More information and transparency. Crowdsourced rating systems and customer reviews, like those on Amazon, help customers and providers bridge the anonymity of the internet. Status trackers help users see that providers are working on their requests. Tools like Estonia’s personal data portal allow citizens to see what government institutions are accessing their information and why.
- Stronger data protection and cybersecurity. The less people hear about public institutions and companies playing fast and loose with their data, or about massive hacks, the more likely they’ll be to use online services.
Low trust is getting in the way of the uptake of online services. Investing in these measures would help overcome trust shortfalls, and thus contribute to unleashing the potential of digital transformation for development.
