The balancing act between digital innovation and customer trust is crucial for African businesses, according to a new report from Harvard Business Review Analytic Services with Mastercard.
The study explores the current business landscape through the lens of an increasingly young population, filled with consumers who prioritise brands with shared values and digital experiences that make them feel safe and secure. It highlights trust as an important lever for customer loyalty, business sustainability, and innovation.
Around 60% of Africa’s population is younger than 25. Their embrace of a digital world that is purpose-driven and built on connection bodes well for businesses in a region that prioritises innovation. However, with economic activity increasing online, security and privacy are emerging as foundational not just for trust, but also for innovation.
Over 70% of businesses in Africa recognise that service reliability and availability are paramount. However, less than half (42%) realise the importance of data security and privacy to customers, especially as digital tools and experiences become ubiquitous. To safeguard the trust of consumers and earn a licence to innovate in the future, businesses need to recognise that innovation requires flexibility and commitment.
Businesses are faced with the challenge of innovating to satisfy consumer demand for richer, more satisfying experiences while maintaining consumer trust. However, consumers in the region are also quicker than their global peers to punish businesses for adverse events by withdrawing their trust, which raises the stakes for businesses.
The report notes that 80% of African consumers are eager to embrace digital benefits, but will not buy from businesses or brands they don’t trust. Businesses in the region understand the importance of trust for their own sustainability, with more than three-quarters saying trust improves customer loyalty – and more than half saying it provides a competitive advantage.
“Africa has seen extraordinary digital transformation over the past decade, and with each new milestone in digital inclusion, Africa’s young digital natives and early adopters present companies with an opportunity to reconsider their innovation priorities in line with the elements their consumers value,” says Amnah Ajmal, executive vice-president for market development, Eastern Europe, Middle East and Africa at Mastercard. “Trust is essential for innovation – it is the currency that underpins it. When consumers can trust businesses it gives businesses the space and security to innovate – and that innovation can unlock prosperity across Africa for all Africans.”