The human touch is essential to building digital trust

The robust public debate now embroiling big advances in digital technology has highlighted people's wariness of a world where the line between the physical and virtual is increasingly blurring. In Swiss Re's report "Decoding Digital Trust II," we examine some of the complex factors that drive digital trust. While digital innovation promises to lift insurers' growth prospects, success in this arena still hinges on old-fashioned human efforts to build faith in this transition.

Mistrust of revolutionary technologies has been a common theme throughout the ages. There are numerous examples of suspicion and upheaval that accompanied technology-driven transitions in society and economies. As the Industrial Revolution unfolded to start the 19ᵗʰ century, for instance, there was a backlash against new machinery that some feared would replace skilled labour.

We're currently seeing this phenomenon repeated, this time with some of the technologies that help power digitalisation. For example, some of the same people who have breathed life into Artificial Intelligence are now saying they have regrets. Global experts have raised red flags about the risks of machine intelligence that rivals that of humans. As generative AI apps proliferate, teachers are despairing about the future of the classroom essay.

While some of these worries may amount to hyperbole, I'm still paying close attention. It’s safe to say digitalisation and the rapid blending of physical and virtual worlds has arrived at something of a moment of truth. Some people are questioning humans' ability to effectively manage digitalisation's future trajectory. We must listen to these concerns to guide our efforts as we pursue pragmatic solutions geared toward shoring up digital trust and, ultimately, boosting societal resilience.

The new Swiss Re Institute (SRI) publication "Decoding Digital Trust II" comes at an opportune moment. The report, following SRI's initial deep-dive into digital trust in 2022, assesses some of the powerful cultural, psychological and behavioural drivers of trust that we should take into account in our efforts to successfully advance digital innovations for the insurance industry that can build customer confidence in our protection products.

As CEO of Swiss Re Global Clients & Solutions, where technology and innovation are central pillars of our growth plans for businesses like our B2B2C insurer iptiQ, I know building and maintaining digital trust among our customers is an essential ingredient in our daily contemplations when it comes to product design and user experience. Taking a multidimensional approach to understanding how people perceive trust, and how that trust may be eroded, is of utmost importance.

Although digitalisation may seem ubiquitous in a world where we can do nearly everything online, we still can’t take digital trust for granted. What’s more, there isn’t necessarily a direct correlation between the sophistication of a particular country's digital infrastructure and higher levels of digital trust among its people.

In fact, our SRI experts write that there may be a fundamental misunderstanding of the real building blocks of digital trust: The mere presence of digital infrastructure or AI capabilities in a society isn't sufficient to win people over. Digital trust also demands we advance the values that really matter to consumers, including a sense of purpose, ease of use, the need for security and transparency.

What this means in practical terms is that a successful transition to a digitally driven world must be paired with active efforts to win consumer buy-in, like clearly explaining the purpose of our digital endeavours. One key feedback I've heard from Swiss Re behavioural economists is that re/insurers should make certain our customers understand why it's necessary to collect digital data and what they'll gain in return, whether it is financial benefit, personalised experience or simply something that helps make the lives of everyone easier.

As we design our digital platforms, it is critical that they remain user-friendly. There's a compelling study, published earlier this year, that explores how ease-of-use factors in digital financial services can directly and positively influence trust relationships. This doesn't merely mean having intuitive operating systems, either. Platforms that make terms and conditions easily digestible for people who aren't steeped in our industry's jargon are also important.

We should engage our customers at eye level and as partners in a trust-building conversation.

One hurdle that demands our attention is the perceived opacity of automated decision-making tools, which is likely contributing to angst that these could eventually develop in ways that expose us to societal-scale risks. Perhaps such concerns are unavoidable, given that the complexity of algorithms underpinning AI may make it difficult for consumers to quickly grasp how they work.

If uncertainty is allowed to persist or is magnified, however, mistrust may follow. Consequently, some of AI's benefits like swifter decision-making, quicker processing and lower costs may go unrealised. To remedy this, solutions based on concepts of "Explainable AI" can be extremely valuable in addressing trust gaps. Nurturing explainability helps stakeholders make informed decisions while protecting privacy, confidentiality, and security.

This resonates with me, because I, too, want to understand the basics about a new technology before I adopt it. That's the appeal of AI-powered systems that lay out in easily decipherable terms how my information will be used to reach fair and ethical decisions. In the end, building digital trust means ensuring people understand how our industry is working diligently to eliminate bias from AI, so that this technology can fulfil its potential in helping us become more efficient.

Digitalisation will play an increasingly significant role for re/insurers, boosting efficiency and cost-effectiveness while setting the stage for new solutions – in short, contributing to a virtuous cycle where faith in our industry also grows. This will work best when this shift, and the trust that underpins it, is led by the kind of human intelligence that's guided Swiss Re since our founding back in 1863.