Do You Trust Me? The Foundations of Digital Trust and Customer Loyalty

Do you trust me? A question someone you’ve known for years asks you just before suggesting doing something that is either entirely new or somewhat outside of your comfort zone. Your answer is yes. It’s always yes. (Unless it’s not. Awkward). 

So, you commit. You jump. You put your trust in their hands. You fall backwards, knowing they’ll always catch you.  

Right?  

But, what if they don’t? What if it was all one big trick? 

That trust might not entirely disappear - but you’ll remember it. You might feel humiliated if people see or hear about it, if people laugh about it.  This is how it feels to be a victim of a scam, fraud, or online attack. You feel helpless. You feel like a fool.  

The same applies to any relationship, whether personal or in a business setting. It can sometimes take years to build a certain level of trust with a person, business, or institution, but it can be lost in an instant. 

Trust is imperative for relationships to thrive. 

This is why gaining and, critically, maintaining trust is so incredibly important for the successful adoption of new products, services, and ways of operating as a society. In the digital identity sphere, this is exemplified by the varying degrees of success of government electronic identity (eID) schemes around the globe. 

According to the OECD, public trust (defined as the share of people who report having confidence in the national government) in the Nordics is above 60%, with Norway being the highest at 77%. There is also a persistently higher degree of trust beyond government, such as in private institutions and wider society, in these countries than any others in the world. 

This positively correlates with their trust in - and subsequent adoption of - eID schemes. Norway comes in highest with a 92% adoption rate, and Sweden and Denmark are second and third with 86% and 85%, respectively. Finland also ranks highly at 72%. One example would be an anomaly, but four examples across multiple schemes is a clear trend. 

On the other side of the spectrum, trust in the UK government was 30% in 2023. Yes, you read that correctly. Less than a third of the UK population trusted the government last year – and that figure is not an anomaly. According to a study by the Policy Institute at King’s College London, confidence in the UK Government had been consistently falling before that, dropping from 29% in 2018 to 24% in 2022 – creeping ever closer to the 19% confidence seen in 2009 when it was at its lowest, after the financial crash.  

If these figures are analysed alongside adoption rates of previous UK government identity schemes, the widespread failure of such schemes is unsurprising. In 2010, the UK’s £4.5 billion national identity card scheme was scrapped, with only 15,000 cards bought by the UK public. Fast-forward to 2023, and the UK’s attempt at a digital identity scheme for accessing government services online, GOV.UK Verify, was also shut down due to problems with the registration process and a lower-than-anticipated number of users, which peaked at around 10 million (14.9% adoption). 

In August 2023, this was replaced by GOV.UK One Login, enabling users to access all government services using a single reusable digital ID. It has been developed with the intention to incorporate lessons learned from Verify, such as ensuring accountability, improving usability and developing a roadmap for adoption.  

As of March 2024, 3.8 million people (5.7% adoption) had verified their identity via the app. Although it’s in the early stages, adoption figures are low. Only time will tell whether the improvements to this new scheme will increase uptake or if there is a significantly larger challenge for countries with low levels of trust in the government, such as the UK and US.  

This raft of examples demonstrates a clear interrelationship between the levels of trust in an institution and adoption of its services. The same is true for peer-to-peer and business-to-consumer interactions. If you trust someone, you are more likely to believe what they tell you, take it onboard, and be influenced by that person. Similarly, for organisations to attract new customers, they must build trust with their future customer base.  

Reputation is everything.  

Organisations that repeatedly allow their customers to be defrauded will quickly lose the trust of their existing customer base, of wider society, and of regulators, impacting their future growth prospects and making them vulnerable to fines. In a world of social media, reputational damage can be hugely exacerbated. One misstep can go viral in an instant.  

Examples can be seen across an array of sectors, including Banking, FinTech, and more, but Crypto has arguably experienced more of these consequences than any other sector in recent months. Binance was fined $4.3 billion, and its CEO was sentenced to four months in prison after it was revealed the company enabled transactions from Hamas, ISIS and Al Qaeda. Meanwhile, New York regulators found that:   

“Coinbase failed to maintain a functional compliance program that could keep pace with its growth.” 

They determined that this put the platform at risk of criminal conduct, including fraud, money laundering, activity related to child sex abuse material and drug trafficking.  As a result, Coinbase’s CEO Brian Armstrong has spent a lot of time speaking on news outlets attempting to rebuild their reputation and regain societal trust by publicly talking about new processes they’ve implemented and asking for clear rules from regulators.   

Dating and social media are other sectors where trust has been eroded. Take Tinder as an example. There is a long-term pattern of user experiences, including misleading profiles, safety concerns, unwanted explicit content and fraud. The most recently publicised case featured a Tinder fraudster who scammed women out of $80,000 after stealing their identities by taking photographs of their driving licences and bank cards to take out loans.

Paying customers on the platform went down 9% from 2023 to 2024 with figures falling for a sixth straight quarter. Their CEO cited that the platform was working on improving the Tinder experience, especially for women.

Don’t lose the trust of your customers.  

Trust is easily lost and incredibly difficult to regain. One scam, one fine, or one mistake can damage a relationship, but multiple occurrences can destroy it forever.  

Customer protection and security are critical to retention and growth. Therefore, to ensure the continued adoption of products and services, organisations must implement processes, technology, and controls to protect against criminal and fraudulent activity.  

First-line fraud detection, leveraging certified Liveness detection proves extremely efficient in providing defence against spoof attacks or deep fakes. Document and database verification processes that utilise centralised government identity schemes and offer real-time alerts on suspicious activity are also great ways to safeguard customers. Robust solutions such as these can be implemented to protect users whilst simultaneously building trust, elevating the customer experience, and driving customer growth. 

“So, close your eyes, lean back and jump.... 

...I’ll catch you.  

Do you trust me?” 

Find more information on how to prevent digital fraud and safeguard your organisation on the ComplyCube website, or reach out to one of our compliance experts.