The Value of Digital Trust Index reveals potential to build growth during global economic slowdown
- Collaboration with economists at Cebr reveals digital trust’s trillion dollar opportunity to drive economic growth
- Global study finds 5 percentage point increase in digital trust is associated with an average increase in GDP per capita of US $3,000
- 68% of consumers support the creation of a digital identity system
- Digital trust gap emerging with non-Western markets leading Western markets leading with more trust in the digital economy
London, UK, 16 August 2022 - A new global study has revealed for the first time an economic value to building digital trust. A 5 percentage point increase in digital trust results in an average increase in GDP per capita of US $3,000. The findings are significant due to the global economic slowdown because investing in building digital trust into digital economies has the potential to deliver growth and productivity. The Digital Trust Index: the value of digital trust is seminal research, conducted by Callsign, the digital trust pioneer, and the Centre for Economics and Business Research (Cebr), into the attitudes and drivers of digital trust across modern economies.
“This Callsign research reveals the value of building digital trust to the global economy, and reflects the conversations and enquiries we are engaging in. Organizations across the globe are looking at digital identity as the foundation to their digital ecosystem– delivering trusted interactions for consumer-to-business as well as business-to-business interactions. The research also demonstrates the negative impact if the industry doesn’t take proactive measures to address consumers’ building lack of digital trust,” says Julie Conroy, Head of Risk Insights at Aite-Novarica Group.
The new report has found that a ‘digital trust gap’ is emerging around the world. Non-western markets have a positive trust gap (South Africa (16%), ME&A (15%), Brazil (6%) and APAC (5%)) indicating consumer attitudes to digital trust in the digital economy exceed societal trust levels. Western markets have a negative trust gap (USA (-4%), Benelux (-6%), and Canada (-9%)) where societal trust is higher than digital trust. The UK was the only market where digital and societal trust levels were the same.
With more of consumers lives online, this is a critical differentiator for emerging markets as economies slow down. The potential to unleash GDP per capita growth from the digital economy may see emerging economies gain advantage in this new online era.
Zia Hayat, CEO and co-founder, Callsign, said, “For too long, trust has been referred to as an abstract concept without commercial consideration or investment to address it however, the influence of digital trust is now quantifiable. At this critical time, our study found hundreds of billions could be unleashed into our economies by improving digital trust. For businesses and governments this means working together to build ethical, secure digital identities. Knowing who you are interacting with online is the foundation for digital trust, and now is the time to act as we look to reimagine our economies for a digital world.”
The prevalence of online crime in Western markets is having a major impact on our trust levels and as a result our economies. 36% of US consumers surveyed claimed to have been affected by online fraud or a data breach. The digital economy is expected to grow from US $14.5 trillion in 2021 to US $20.8 trillion* by 2025, while the cost of online crime over the same period will rise from US $6 trillion to US $10.5 trillion. If business and governments want to harness the power of digital trust, they must tackle the foundational element, digital identity.
47% of consumers expect governments to create a more secure digital world. To achieve this, over two thirds (68%) of respondents support the creation of a digital identity system covering technology, process and data policies overseen by an independent body. Consumers would trust banks and financial services firms the most to create and maintain the system.
Josie Dent, managing economist, Cebr, said, “Our study breaks new ground in valuing digital trust in society and modern economies. We found a significant relationship between digital trust and societal trust and a further relationship with GDP per capita. The end result is that greater digital trust has the potential to boost economic activity. There are several channels through which this could occur, including greater digital trust making transactions easier between consumers, businesses, and governments.”
Read the full Digital Trust Index report here https://www.callsign.com/digital-trust-index
About The Centre for Economics and Business Research (Cebr)
The Centre for Economics and Business Research (Cebr) is an independent consultancy with a reputation for sound business advice based on thorough and insightful research. Since 1992, Cebr has been at the forefront of business and public interest research. They provide analysis, forecasts and strategic advice to major UK and multinational companies, financial institutions, government departments and agencies and trade bodies. For further information about Cebr please visit www.cebr.com.
Notes
The methodology for this report involved conducting a survey to measure levels of trust in online and digital services across nine key regional markets. As part of the report, further questions were asked about trust in the wider society to be able to analyse differences and common trends.
Research was carried out by 3Gem in February 2022.
Samples were as follows
- APAC 2,500; (Hong Kong 500, Singapore 500, Indonesia 500, India 500, and the Philippines 500)
- Benelux 500
- Brazil 1,000
- Canada 2,000
- Middle East 2,000; (UAE 500, Kingdom of Saudi Arabia 500, Qatar 500 and Bahrain 500)
- Nordics 500
- South Africa 1,000
- UK 1,000
- USA 2,000
*In December 2021, the Global GDP estimate was $94 trillion (Visual Capitalist) with the World Bank estimating that 15.5% of Global GDP in 2021 was the digital economy, meaning $14.5 trillion. The World Bank also estimates that over the past 15 years, the digital economy has grown 2.5x quicker than the Global GDP. To calculate the value of the digital economy in 2025, we averaged global growth forecasts for 2022 from the IMF, World Bank and Fitch Ratings, which equalled 3.73%. Given that the digital economy grows 2.5x quicker than Global GDP, the digital economy’s growth rate for 2022 was 9.33%. Compounding this growth until 2025 meant that the digital economy would be worth $20.8 trillion, while the Global GDP would be $108.9 trillion. Therefore, the digital economy would account for 19.13% of Global GDP in 2025 an increase of 3.63% over 2021. Given the current macroeconomic context these are clearly projections, which assume that the economy will continue to grow through 2025 without a significant economic downturn. Additionally, the value of the digital economy may in fact be a greater percentage of the Global GDP in years to come as our economy continues to benefit from digital innovation and more humans getting access and begin contributing to the digital economy.
The above analysis was conducted by Callsign Corporate Strategy team.