Balancing act between digital innovation and customer trust crucial in Middle East, says new report

Businesses in region serve an increasingly young population

by

Somshankar Bandyopadhyay

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Published: Fri 21 Apr 2023, 12:15 PM

Eighty per cent of Middle East consumers are eager to embrace digital benefits but will not buy from businesses or brands they don’t trust, a new report has shown.

The report, from Harvard Business Review Analytic Services in association with Mastercard, 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.


Unicef estimates that half the population in the Middle East and North Africa (Mena) region is 24 or younger. “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,” the report notes.

The study found that over 70 per cent of businesses in the Middle East recognise that service reliability and availability are paramount. However, less than half (42 per cent) 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 license to innovate in the future, businesses need to recognise that innovation requires flexibility and commitment.


“As the Middle East’s young digital natives and adopters of new technologies become more discerning, companies have an opportunity to reorganize their innovation priorities to better align with the elements their consumers value, which in turn builds deeper trust. When consumers can trust businesses, it gives businesses the space and security to innovate. Innovation can bring risk, and consumers across the region aren’t afraid to punish businesses they see as risky. That’s why trust is central to good innovation—it is the currency that underpins it,” said Amnah Ajmal, executive vice-president for market development, Eastern Europe, Middle East, and Africa, Mastercard.

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 study showed.

Middle East consumers are more sensitive than their global peers to factors that damage trust in brands, and data security is a top concern. Around 60 per cent of consumers in the region said incidents in which consumer data has been mismanaged would damage their trust.

Consumers in the Middle East have also underlined the importance of strong values, with 80 per cent saying they prioritized buying from businesses that act on causes they care about, a far higher proportion than the global average of 63 per cent. This includes the environment, supporting small businesses, women’s economic empowerment, disaster relief, and aid.

The report further explores how businesses in the region are digitizing their processes through best practices such as:

Build security into products and be transparent when issues arise. Customers expect secure, reliable, appropriate systems they can trust to keep their personal data safe.

Communicate the company’s vision and values. Consumers in Middle East prioritize buying from brands that support their values.

Make innovation part of the company culture. A considered 360-degree approach to innovation will benefit large companies with legacy infrastructure and set processes.

Partner with like-minded companies to boost innovation.


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