02/27/2017

Consumers lead the way on digital trust in Central and Eastern Europe – will companies follow?

Author: Olga Grygier-Siddons, Chief Executive, PwC Central & Eastern Europe Olga-Siddons

Businesses in Central and Eastern Europe have been given an enormous credit of digital trust by local consumers. The challenge now is to safeguard it.

A recent PwC survey found that about 70% of internet users in Poland are willing to share data with online platforms, as long as their information is sufficiently protected. That illustrates neatly how the story of online trust in our region has largely been one of untapped potential: Our consumers have been faster than our companies to embrace the new reality where everyone is online, all the time. People are expressing online trust and looking for new ways of interacting with businesses, but it’s not clear whether businesses are truly listening yet.

Improving technology in the region – already often better than in Western Europe, as infrastructure “leapfrogs” ahead – means more and more transactions are taking place online. A world in which people are constantly connected to the Internet means a world of expanded consumer choice, so companies need to stand out from the competition by offering relationships and experiences, not just products.

In Poland, for example, 77% of people connect to the Internet using more than one device, in more than one location, every day; 44% of consumers want to receive personalised offers from businesses, delivered to their mobile devices. And in all of the categories of online services we analysed, more than 30% of respondents said convenience is more important than price. Still, they recognise the trade-off: in order to get personalised offers, they need to offer up data about themselves. They want to make sure that the benefit is worth the cost; that the data will be handled appropriately, and that personalisation won’t lead to excessive interference in their personal lives.

Olga Grygier-SiddonsTrust and transparency are the key to meeting those concerns – and that requires businesses to change their mind-set. One cautionary tale comes from a supermarket chain in the region, which faced a consumer backlash after journalists reported on how much data it was collecting on members of its loyalty programme. Instead of hiding the amount of data they’re collecting and why they’re collecting it, companies need to be up-front with their customers, showing proactively how sharing data will help build a better relationship and provide better service.

Unfortunately, thus far CEOs in the region have shown a lower level of concern than their global peers about threats to cyber-security: in PwC’s annual CEO Survey, only 46% said they were “somewhat concerned” or “extremely concerned” about this threat, the lowest percentage on a list of 10 threats, and well below the global average of 61%. But the EU’s new General Data Protection Regulation is bound to concentrate minds, as it revolutionises the way companies handle consumer data.

For CEE companies in EU member states, the new rules undoubtedly mean new compliance costs, but the savvy ones can find ways to use the change as an opportunity to solidify consumer trust.

When the GDPR takes effect on 25 May 2018, it will be a tipping point in consumer awareness of how companies use their data; among its requirements are procedures for customers to examine, correct and delete data held by companies, and it imposes penalties of up to 4% of turnover for failure to comply. As the date approaches, consumers will be flooded with new versions of the terms of service for websites they have interacted with – including many that they’ve forgotten about.

Smart companies can stand out from their competitors by doing more than just the minimum: explaining the changes in plain language and pointing out the benefits consumers receive from the relationship. Ultimately, the best way for businesses to get consumers to trust them is to show that they have enough confidence in themselves to be open and transparent about their digital relationships with consumers.

Like their counterparts around the world, businesses in Central and Eastern Europe lost years of hard-earned trust overnight when the global financial crisis hit in 2008. The online world has given them an opportunity to earn it back, but it will require commitment to new ways of relating to their customers. This matters, because due to their troubled history, societies in this region have suffered for too long from a lack of trust in all areas (not just online).

If companies can grasp the role and significance of digital trust, they may find ways to leverage it to increase face-to-face trust, with benefits that flow far beyond the world of commerce.

Olga Grygier-Siddons is the Chief Executive Officer of PricewaterhouseCoopers Central and Eastern Europe (CEE) which comprises 29 Member Firms of the Global PwC Network. Olga is a member of the PwC Global Strategy Council which comprises the Territory Senior Partners from the largest 21 territories in the PwC Network.

Twitter
LinkedIn
Facebook
Google+

« Confident or concerned? Inside the mind of today’s industry CEO | Main | Software greasing the wheels for Technology, Media and Telecom transformation »

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated and will not appear until the author has approved them.