Trust Through Transparency: Regulation’s Role in Consumer Confidence

The flow of personal information has become a cornerstone of modern business operations. From online shopping to social media, data collection is ubiquitous, and consumers are taking notice and taking action.

For the past six years, Cisco has been studying consumer sentiment across the privacy landscape and the evolution of privacy from a compliance matter to a consumer requirement. For consumers, knowing their personal information is being handled responsibly is crucial to earning and building trust.

In this year's survey, 75% of respondents said they won't purchase from an organization they don't trust with their data. And for the first time, a majority of respondents are not only aware of their local privacy laws, but also report feeling significantly more protected by these regulations.

Growing regulatory awareness fosters consumer confidence

There are now more than 160 countries with national or multinational privacy laws in place. In 2019, a year after the General Data Protection Regulation (GDPR) went into effect in Europe, only 36% of survey respondents were aware of their country's privacy laws. Today, 53% report being aware of their national privacy laws.

And interestingly, awareness of privacy law highly correlates with consumer confidence. Among respondents who were not aware of their country's privacy laws, only 44% said they could adequately protect their personal information. By contrast, among those who were aware of these laws, 81% said they could protect their data. With the strong correlation between regulatory awareness and consumer confidence, transparency can be a differentiator when it comes to customer trust.

Transparency as a driver of trust in the AI era

This consumer awareness coincides with the rapid advancement of Generative AI (Gen AI). According to the survey, Gen AI users seem to be highly aware of the individual and societal risks of this innovative technology if it is not used with appropriate controls and protections. Eighty-four percent said they would be "Somewhat Concerned" or "Very Concerned" their data could be shared, and 86% were concerned that the output would be wrong. Strong privacy laws (59%) and AI laws (62%) help to make respondents feel more comfortable sharing information with AI applications, as well as training employees on AI ethics and instituting an AI ethics program.

As governments and regulatory bodies around the world work to establish robust frameworks to govern the collection, processing and application of data used in AI, organizations should focus on maintaining the consumer awareness and confidence that has been fostered through privacy regulation and compliance over the past several years. Organizations that are transparent about their data practices and adhere to both existing and emerging regulatory standards can build and maintain trust in this era of AI.

Explore these trends and more in the Cisco 2024 Consumer Privacy Survey.