KPMG's Guardians of trust report explores the evolving nature of trust in the digital world.
At a time when machines are increasingly working in parallel with people, there is a clear need for improved and proactive governance of data and analytics.
Despite the proliferation of data, KPMG’s Guardians of trust survey found that one in four C-level executives in Australian organisations don’t trust the way their own organisation uses different types of analytics.
CEOs had 77 percent trust, department heads or equivalent had just 52 percent trust, and of Directors, 68 percent had trust.
“It’s often not clear who is responsible for data, which is unacceptable given the investment being made in areas such as analytics and artificial intelligence (AI),” says Anthony Coops, D&A Leader, KPMG Australia. “But it’s not easy, it’s often cultural, and there needs to be a more holistic strategy and accountability, which means better alignment at executive level, and real collaboration by the people on the ground.”
Trust in data really matters, Coops says, as surprisingly organisations are still getting their heads around the impact of bad data quality, and the short and longer-term ramifications on staff, suppliers, customers and reputations. Add to this the cost and process implications around fixing invoicing errors, additional workloads on call centres and complaints management teams and fall outs online etc.
“Whether it’s our phones and the seamless connectivity across our apps, more and more we are experiencing our information being shared with great affect, and we are very conscious now of when it’s not,” Coops says.
Coops points to a KPMG report, Creating a truly analytical environment is top priority for Insurance CEOs, that delves into how the insurance industry is focusing deeply on data, changing the way it does business in the process. It highlights four areas that insurers can focus on to create an analytical environment and outperform their competitors, with a key pillar being ‘master the data’.
Coops says insurance, and other industries, are seeing AI as a massive opportunity to better engage with customers, increase relevance and gain a competitive edge.
But in business, we are seeing an increasing expectation gap between what we have as consumers to make day-to-day decisions – like apps on our phone working seamlessly together, having everything at our fingertips and totally mobile – and our ability to make better decisions at work when systems are disconnected, require manual rework, waiting hours not seconds and the endless silos. Expectations about what ‘should happen’ at work are not being met.”
When the question of trust was put to different departments across organisations, Australian marketing departments were the least trusting of how their company uses data. Just 53 percent proclaimed their trust, and 44 percent their distrust.
Human Resources departments were the most trusting, at 74 percent, followed by IT departments at 69 percent.
According to David Evans, Director, KPMG, the unique departmental views can come from different dealings with data, and varied levels of technical or practical understanding.
“IT is likely to be more trusting because they have the technical grasp of how the data is gathered and stored, while marketing departments are perhaps more cynical because they’re driving the surveillance economy,” he says.
Moreover, as ‘Guardians of the Customer’, CMOs and CXOs understand the criticality that accurate data relies on a deep value exchange with the customer. Accuracy and depth comes with valued connections with your brand, an area in need of continual improvement for most organisations, in addition to turning data into actionable insights.
The Guardians of trust report also revealed how different sizes of Australian businesses trust their approach to data compared to others.
Large organisations (1,000 to 4,999 employees) had 71 percent trust, while very large organisations (5,000 to 19,999 employees) had 75 percent trust. However, companies with 500 to 999 employees had a lower 62 percent trust.
“Smaller companies are less trusting than larger firms. It’s counter intuitive, since you’d think smaller companies with less than 5,000 people would be more trusting, as smaller businesses generally have closer-knit cultures compared to the major firms,” Evans says.
However, the survey showed that large firms are only more trusting when their operations extend beyond the Asia Pacific region. Organisations that have operations in more than one country in the Asia Pacific region reported a distrust in their approach to data at 40 percent. Companies with operations further afield (such as Europe or the US) distrusted their approach at a lower 26 percent.
“It may be because Europe is the most advanced with their data regularity environment and data protection laws,” Evans says.
High-profile cyber security breaches have brought into sharp focus the risk of collecting vast amounts of data if something were to go wrong, so building in governance and trust is a good way to mitigate risk.
The European Union’s introduction of the General Data Protection Regulation (GDPR) is one of the regulations Evans is referring to that will see companies face heavy penalties if data is used in the wrong way.
The GDPR has implications for Australian companies that have European customers or who process the data of individuals within the EU, as an outsourced service provider, for example, while Australia’s new Notifiable Data Breach (NDB) scheme will place further obligations on organisations operating in Australia.
“Whether it’s the GDPR, NDB scheme or any other data protection laws, now is the time to get on the front foot when it comes to transparency and accountability around data management,” Evans says.
As organisations increasingly use data to drive better decisions and their business models, those actively leading in trust and accountability are likely to see benefits flow through to the bottom line.
"As consumers become more aware of how companies are using their personal data for profit, the standards to which they are held accountable will increase. History shows there are large financial rewards for organisations that genuinely have their customers' best interests at heart,” Evans says.
“In terms of trust and accountability, the sooner you get on top of it the better.”
You can find out more about how trust in data use is a burning platform for businesses globally in KPMG International’s report, Guardians of trust. The report explores the evolving nature of trust in the digital world. Based on a survey almost 2,200 global information technology (IT) and business decision-makers involved in strategy for data initiatives, this report identifies some of the key trends and emerging principles to support the development of trusted analytics in the digital age.