State Sponsored Fraud Attacks and Quantum Computing Pose Key Risks to Digital Trust in the UK, According to Business Leaders

28/11/2024

LONDON — Executives agree that state-sponsored cyber attacks and the dawn of quantum computing are an increasing threat to digital trust, according to a new report, The Future of Digital Trust: Establishing the Foundations for a Resilient, Efficient and Safer Online World by LexisNexis^® Risk Solutions.

Savanta, a leading research firm, interviewed 30 senior executives within banking, FinTech, retail, payments, consumer credit and telecommunications firms on the most pressing concerns facing their respective industries.

CTOs and CROs from several large firms cited the risks from malign state actors and global online powerhouses seeking to erode digital trust by engaging in cybercrime and supporting crime groups to cause damage to UK services. Many are also concerned these bad actors are increasingly investing in research and development into quantum computing technology that would bypass modern encryption standards relied on by global financial services and others, further eroding trust with UK citizens.

“Digital trust is under siege from an era of misinformation, fraud and AI-driven threats,” says Mike Nathan a fraud and identity expert at LexisNexis Risk Solutions.  “In an increasingly dominant digital economy, the ability for organisations to maintain digital trust between each other and their customers is increasingly becoming an existential pursuit.”

Digital trust is defined as individuals’ expectation that digital technologies and services – and the organisations providing them – will protect stakeholders’ interests and uphold societal expectations and values. The report identifies four foundational pillars as empowerment, protection, understanding and respect, which are essential for organisations to build and maintain lasting digital consumer trust.

While there is widespread agreement amongst leaders that digital trust underpins their businesses’ prosperity and even survival, measuring it is proving to be an almost impossible task because of the federated nature of today’s digital trust. This leads to turning to proxy measures such as NPS scores, customer retention and satisfaction studies.

The old idea that customer loyalty infers trust was also debunked in the digital context by a number of participants of the study, with many citing use of Big Tech as an example of users overlooking their misgivings due to a lack of alternatives. “In that respect consumers are choosing dependency over trust and the relationship is incredibly shallow, despite those companies perceiving they have trust because of a customer using their services,” added Nathan.

Among the other findings of the in-depth research are:

• Collaboration Hesitancy – Confusion, misunderstanding and fear of data protection rules, allied with mistrust of competition and what may undermine competitive advantage holds businesses back from wider collaboration over identity verification and fraud prevention that would support stronger digital trust.
• Partnerships Suffer – Businesses operating multiple retail partnership deals via frameworks like open banking, risk derailing partnerships if they fail to streamline their approach to digital trust.
• Solid Foundational Framework in Place – Most respondents believe that the UK’s regulatory framework, including consumer duty and open banking create a strong foundation and more confident environment for digital innovation in the UK.
• Legacy Technology Hinders Trust – Banks and financial institutions would like to start from scratch in adopting new technologies to improve digital trust but are held back by legacy technology.
• Friction Engenders Confidence – Authentication ‘at the blink of an eye’ may prove to be an own-goal for some services whose customers value the reassurance of built-in friction.
• Good Trust Leads to Inclusivity – Half of respondents proactively address digital inclusivity as part of their online experience, with consequences for the UK’s digital divide and both financial and social implications for consumers.

Nathan continued, “This research clearly shows how interconnected organisations involved in a customer’s online journey have become and how mutually dependent they are on maintaining digital trust. As business and society rapidly move towards a digitally-dependant environment, digital risks are becoming increasingly immersive and powerful, but so, too, are the opportunities for businesses.

“Companies that prioritise building trusted relationships with their customers can, for example, use data in broader, more creative ways to craft even more personalised services with higher conversion rates. They can also use shared collaborative intelligence to create faster, seamless and more secure experiences that protect customers from online threats. In short, digital trust is no longer a nice-to-have – it’s a business imperative.”

"As we move towards a digital future, the concept of digital trust becomes more important for FinTech companies,” says Roberto Napolitano, CMO at Innovate Finance. “The findings from LexisNexis Risk Solutions highlight how rapidly evolving threats are testing the resilience of our digital systems. For FinTechs, navigating these challenges requires both robust technology and a commitment to regulation, collaboration, and transparency to better protect consumers and unlock opportunities for more innovation and growth."

The Future of Digital Trust: Establishing the Foundations for a Resilient, Efficient, and Safer Online World by LexisNexis Risk Solutions report explores the current state of digital trust and its implications for organisations, drawing key insights from research conducted with 30 chief risk officers (CROs), chief technology officers (CTOs), and chief customer experience officers (CXOs).

LexisNexis® Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.