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The business value of trustworthiness
Trust has long been vital for successful dealings between businesses and their customers. As online interactions increasingly supplant face-to-face interactions, and technology enables secure e-commerce transactions on reputable platforms, trust is becoming ever more essential for virtually every enterprise — especially in Asia where the pandemic has accelerated the region’s digitalization trend.
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Wooden blocks with the word trust. (Shutterstock/Andrii Yalanskyi)
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rust has long been vital for successful dealings between businesses and their customers. As online interactions increasingly supplant face-to-face interactions, and technology enables secure e-commerce transactions on reputable platforms, trust is becoming ever more essential for virtually every enterprise – especially in Asia where the pandemic has accelerated the region’s digitalization trend. It is therefore timely for business leaders in Asia to seize the opportunity to enhance trust, which is crucial to a company’s success.
The value of trust in the digital age
More than sentiment, trust has economic value, which is especially relevant in today’s digital age. At the macro level, trust enables new disruptive products, services and strategic moves; at the micro level, it smooths the way for smaller transactions at scale among a vastly greater number of buyers and sellers who have no prior relationship, via the digital economy.
Trust is particularly valuable for companies in Asia given that the region now accounts for nearly 60 percent of the world’s online retail sales. E-commerce revenues grew by 40 to 50 percent in Vietnam, Indonesia and India in 2020, outpacing most of the world. Today, the growing youth population in Indonesia has rapidly adopted new technologies and become a sizable potential customer base for the digital economy, with revenue in Indonesia’s e-commerce market projected to reach US$52.93 billion in 2023.
Trust pays off for businesses. The Boston Consulting Group (BCG) report “What AI Reveals About Trust in the World’s Largest Companies” found that:
- The top 100 most trusted companies each year achieved above-average total shareholder return, faster recovery during the height of the pandemic and better post-crisis performance.
- The 100 most trusted companies generated 2.5 times as much value as comparable businesses at year-end 2021. They also had 47 percent higher price-to-earnings multiples.
These links between trust and value highlight the need to take trust seriously.
