The Intersection of Trust, Data Security and the Financial Industry
21
The Chertoff Group: Financial Security Series Trust, Reputation, Data Security & Privacy and the Financial Industry Sept. 9, 2014
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This presentation focuses on the intersection of trust, the financial industry and data security/privacy. Ben Boyd, Edelman's president of Practices, Sectors and Offerings, discussed consumer's low trust in the financial industry, the critical role data security plays in driving consumer trust and how companies should think about using data security to bolster trust in their organizations as security has moved from the backroom to the boardroom.
Transcript of The Intersection of Trust, Data Security and the Financial Industry
The Chertoff Group: Financial Security SeriesTrust, Reputation, Data Security & Privacy and the Financial Industry
Sept. 9, 2014
“Trust is the foundation of all relationships, including those between enterprises and the markets they serve. As our world becomes more connected and more dependent on cloud and mobile technologies, maintaining control over trust must be a top priority for all CEOs, CIOs, CISOs and IT security managers. When trust is compromised, business stops.”
- Jeff Hudson, CEO, Venafi
We are living through a period ofprofound
transformation.
PYRAMID ofCOMMUNITY
PYRAMID ofAUTHORITY
The new dynamic
DIAMOND of INFLUENCE
BOARD OF DIRECTORS
ACADEMICS
TECHNICAL EXPERTS
ELITE MEDIA
CEO
ACTION CONSUMERS
SOCIAL ACTIVISTS
EMPLOYEES
GENERAL POPULATION
REPUTATION reflects how stakeholders feel about you
today ... while TRUST inherently facilitates how they will act with – and for – you in the future.
Two related, but different, critical success factors
REPUTATION
TRUSTStakeholders’ aggregate analysis of past behavior
Stakeholders’ expectation of future behavior based on past
performance
today
yesterday tomorrow
tactical behavioral engagement
There is no business objective which can not be aided by trust and positive reputation or hindered by their absence.
They are vital to the very definition of business value.
Trust as a business asset
The state of trust
NGOS
BUSINESS
GOVERNMENT
Trust remains stable in a volatile world
TOTAL TRUST
TRUST A GREAT DEAL
MEDIA
2013 2014
22% 23%
63% 64%
#1
2013 2014
17% 16%
57% 52%
#3
2013 2014
17% 16%
58% 58%
#2
2013 2014
16% 15%
48% 44%
#4
BANKS
MEDIA
PHARMACEU-TICALS
ENERGY
CONSUMER PACKAGED
GOODS
FOOD AND BEVERAGE
AUTOMOTIVE
TECHNOLOGY
47%
43%
53%
55%
54%
56%
58%
76% TECHNOLOGY
AUTOMOTIVE
FOOD AND BEVERAGE
CONSUMER PACKAGED GOODS
ENERGY
PHARMACEUTICALS
MEDIA
BANKS
79%
70%
66%
65%
59%
59%
51%
51%
+3
+12
+10
+11
+4
+6
+8
+4
Technology leads, finance trails
20142009 2009 VS. 2014
Security critical to consumers trust’
of U.S. consumers worry about the security of their personal information. Temkin Group "Consumer Benchmark Survey", May 5, 2014
of U.S. consumers don’t believe organizations care about their private data and keeping it safe and secure.HyTrust Inc., the Cloud Security Automation Company, March 2014
of global consumers believe failure to keep customer information secure has a significant negative impact on trust in a company2014 Edelman Trust Barometer: Financial Services Industry
74.8%
72.5%
80%
Financial information greatest concern
Browsing activity
Content posted by others to social networks
Content posted by you to social networks
Frequent purchase / shopping data
Health information
Emails
Personal information
Financial information
12%
13%
17%
26%
28%
36%
78%
90%
Proprietary study conducted by Edelman in 2012 found…
Fin
an
ce
On
lin
e S
...
Me
dic
al
...
Go
ve
rn..
.
So
cia
l N
...
Te
ch
no
log
y
Ne
ws &
...
Au
tom
oti
ve
Fo
od
& G
...
Ga
min
g
Uti
liti
es*
92%
84%
78%
77%
69%
63%
50%
50%
43%
37%
69%
33%
51%
48%
12%
27%
12%
9% 11%
6%
23%
Importance of privacy and security in each industry (global)Trust in each industry to protect personal in-formation (global)
23-point gap in expectations
Financial industry not meeting customer security needs
51-point gap in expectations
Political Action (sign a petition, con-tact a politician, meet a representa-
tive)
Stop/Reduce Technology Use Social Activity (post content to social/business social media, write an
op-ed or letter)
56%
40%29%
Actions your customers will take when you falterProprietary study conducted by Edelman in 2014 found…
53% believe government should regulate the financial services industry more
We must build trust
Trust has tangible benefits
Series119%
33%
67%
73%
30%
44%
54%
75%
85%
Bought shares
Paid more for products/services
Chose to buy products/servicesRefused to buy products/services
Recommended them to a friend/colleagueCriticized them to a friend/colleague
Shared negative opinions online
Sold shares
Shared positive opinions online
DISTRUSTED COMPANIES +_ TRUSTED COMPANIES
Key attributes that build trust
IS AN INNOVATOR OF NEW PRODUCTS, SERVICES OR IDEAS
OFFERS HIGH QUALITY PRODUCTS OR SERVICES
TAKES RESPONSIBLE ACTIONS TO ADDRESS AN ISSUE OR CRISIS
HAS TRANSPARENT AND OPEN BUSINESS PRACTICES
HAS ETHICAL BUSINESS PRACTICES
COMMUNICATES FREQUENTLY AND HONESTLY ON THE STATE OF ITS BUSINESS
LISTENS TO CUSTOMER NEEDS AND FEEDBACK
TREATS EMPLOYEES WELL
PLACES CUSTOMERS AHEAD OF PROFITS
ENGAGEMENT
INTEGRITY
PRODUCTS & SERVICES
DELIVERS CONSISTENT FINANCIAL RETURNS TO INVESTORS
HAS HIGHLY-REGARDED AND WIDELY ADMIRED TOP LEADERSHIP
RANKS ON A GLOBAL LIST OF TOP COMPANIES
WORKS TO PROTECT AND IMPROVE THE ENVIRONMENT
ADDRESSES SOCIETY’S NEEDS IN ITS EVERYDAY BUSINESS
CREATES PROGRAMS THAT POSITIVELY IMPACT THE LOCAL COMMUNITY
PARTNERS WITH NGOs, GOVERNMENT AND 3RD PARTIES TO ADDRESS SOCIETAL NEEDS
PURPOSE
OPERATIONS
Engagement & Integrity build trust most
STA
TED
IM
PO
RTA
NC
E
STATED PERFORMANCE
ENGAGEMENT
INTEGRITY
OPERATIONS
PURPOSE
PRODUCTS & SERVICES
HIGH-PERFORMING ON HIGH PRIORITIESUNDER-PERFORMING ON HIGH PRIORITIES
UNDER-PERFORMING ON LOWER EXPECTATIONS HIGH-PERFORMING ON LOWER PRIORITIES
Now tablestakes, in 2008 Operations were much higher in importance for building trust.
BUSINESS IMPORTANCE VS. BUSINESS PERFORMANCE ON 16 TRUST DRIVERS - GLOBAL
TRUST-BUILDING OPPORTUNITY QUADRANT
Behaviors impact trust
PAYS APPROPRIATE LEVEL OF TAX
RESPONSIBLE SUPPLY CHAIN MANAGEMENT
RESPECTS EMPLOYEE RIGHTS
PROTECTS CUSTOMER DATA
ENSURES QUALITY CONTROL IN PRODUCTS
80%
83%
85%
85%
86%
ENGAGEMENT INTEGRITY
ENGAGEMENT INTEGRITY
ENGAGEMENT INTEGRITY
ENGAGEMENT INTEGRITY
ENGAGEMENT INTEGRITY
PURPOSE
PRODUCTS & SERVICES
PRODUCTS & SERVICES
If companies exhibit these positive behaviors... …it will have its greatest impact in these clusters
The key to moving forward
… a period of profound transformation
Boardroom from backroom
When, not if
Communicate & engage
Take collective action
