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The European Union General Data Protection Regulation (GDPR) celebrates its first anniversary on May 25. The landmark regulation has resulted in a flurry of data breach complaints in its first year. These events impact not only the wider consumer ecosystem, but also employee data and digital trust—a key driver of business performance in a time of disruption and transformational change.
Happy first birthday to GDPR!
The European Union General Data Protection Regulation (GDPR) celebrates its first anniversary on May 25. The landmark regulation has resulted in a flurry of data breach complaints in its first year. These events impact not only the wider consumer ecosystem, but also trust relating to digital services and the use of employee data. This trust is a key driver of business performance in a time of disruption and transformational change. Similar regulations have been seen or are planned in other jurisdictions around the world.
The GDPR raised privacy stakes a year ago, when it prescribed the data rights of European citizens (customers and employees alike) such as the right to be forgotten and a requirement for unambiguous consent for their data to be used. It affects all firms, employers and vendors that are based in or operate across Europe, or that store and share European citizens’ data, regardless of where the data is processed.
A report in February by the Irish Data Protection Commission (DPC) also revealed a significant increase in privacy complaints and data breach notifications since the region’s updated privacy framework came into force last May. The DPC is currently investigating more than a dozen cases in relation to multinational tech companies’ compliance with the GDPR. This was hardly a shock to consumers, given the Cambridge Analytica scandal of 2018.
While many in the media and academia have studied the impact of these data breach scandals on the wider consumer ecosystem, analysing perceptions and changed behaviour, few in the business world turned the lens inward to their own people—employees.
How have the levels of employee trust changed a year into the GDPR journey? To answer that question, Accenture Research conducted a survey of 10,000 workers and 1,400 C-level executives across 13 countries and 13 industries, including insurance and banking.
Indeed, a majority of employees (61 per cent in insurance and 67 per cent in banking) said that recent scandals over the misuse of data made them concerned that their employee data would be misused. More than half (53 per cent in insurance and 55 per cent in banking) thought that collecting new sources of data on them and their work risked damaging trust.
Employee trust is a crucial topic at the moment, especially within financial services (FS). Our latest research shows while there is commitment to change across the industry, there are very high levels of fear and anxiety in most banks and insurers, driven by uncertainty about the future and particularly job insecurity. Trust and psychological safety at a team level drive business performance and help FS firms thrive, especially during disruption and transformational change. Our Transformation GPS Study shows that a whopping 85 per cent of transformations that fail do so because of organization dynamics, in particular fear and mistrust, that were there before the change started.
The key dynamic behind team-level performance is what Harvard professor Amy Edmondson calls ‘psychological safety’. This describes a group environment where people are not hindered by fear between each other. Psychological safety improves learning, problem solving and risk management, communication and collaboration, creativity and innovation, and employee engagement and performance.
Trust needs to be built between individuals and between teams, across the organisation and within its external ecosystem. Trust is learned through repeated experiences between individuals (or someone representing an organisation or team, like a leader). Trust is reciprocal in its nature—you trust someone, and they trust you—and it is broken quickly. Leaders can build trust through consistency of their words and actions, good judgment in decision-making, and positive relationships.
Digital trust is a microcosm of the wider trust or mistrust between an employer, its leaders and workers. As a relatively new topic it is messy and employee views are still forming. Our research also revealed an overwhelming majority of employees (89 per cent in insurance and 93 per cent in banking) are open to the collection of data on them and their work, if it improves their performance or well-being, or provides other benefits. So while digital trust is a new topic, some of the enduring characteristics of old-fashioned trust still apply.
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