A rapid collapse in public trust in large institutions is heralding a transformative shift in the way businesses operate, world-renowned digital disruption thought leader Rachel Botsman has warned brokers.
Speaking the NIBA Convention in Melbourne yesterday, Botsman delved deep into shifting trust dynamics and how newfound digital capabilities for ranking and reviewing businesses and individuals was promising to make reputation more vital than ever.
“Throughout the 20th century, the way many industries were structured was around this top-down centralised institutional trust. It was very hierarchical and tightly controlled,” she says.
“What’s happening in the 21st century is that is being blown up and we’re moving to these networks and marketplaces that are built on this new kind of trust – peer trust.”
She says this shift is taking place across countless industries, including financial services, and coincided with an ever-worsening crisis of institutional trust, as borne out by a recent Gallup poll.
“This year was very significant. It was the first year that marked a rapid decline in trust in all major institutions,” he says.
“In every year since 1983 they’ve been surveying the US public’s confidence in institutional structures and this year what they found was only 28% of people trust banks, 24% of people trust newspapers, 21% of people trust big business and only 8% trust Congress.
“Study after study is showing that there is something interesting happening in the world – that trust is shifting from this belief in institutions and traditional structures.”
Botsman says her research has found this trust is being replaced by trust in peer networks, through such platforms as AirBnB or BlaBlaCar.
Crucial to the success of these platforms is trust, in the idea, the platform and in other users.
Botsman says there are still many unanswered questions about how this shift will play out in the insurance industry but encouraged brokers to start thinking deeply about it.
“One of my frustrations from researching and doing a lot of work in the area of disruption is the amount of talk about technology. The disruption that is happening is not about technology,” she says.
“I think we are going to look back in five or 10 years time and realise that we were living in an incredibly exciting time, a time when technology is creating a profound shift in trust, and in that transformation are massive threats, but also tremendous opportunities to think differently about our behaviours and how we trust people.”
To read our feature on Botsman and collaborative consumption, click here.