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Trust: The currency of the new economy

Posted 2 years ago in Tech by Erin Smith
Posted by Erin Smith

How did trust, that fundamental building block of human behaviour, become a cornerstone of modern business? Once something that required significant time and investment to build, maintain and yield results, trust is now being made and broken by strangers at speed – and that shift is being commoditised.

Digital technologies have turned trust an imperative currency of the new economy. So what does this mean for the world of accounting and bookkeeping?

Xero asked global thought leader Rachel Botsman, whose expertise in the area of trust is undisputed, to share her insights. Botsman’s seminal book What’s Mine is Yours originated the theory of collaborative consumption and was later recognised by TIME as one of the ‘10 Ideas that Will Change the World’.

Speaking today at Xerocon South in Brisbane – a conference dedicated to the fast-moving world of cloud-based accounting – she spoke of the shift and its implications for the future.

 

“Technology is enabling trust between strangers in ways never seen before,” Botsman said.

“Trust is the bridge between the known and the unknown. If you want to create trust in any organisation, you have to reduce the unknown.”

Citing Uber, Airbnb and BlaBlaCar as examples of commercial platforms that helped create and leverage the trust economy, Botsman addressed the profound business and social implications these business models have generated.

“Technology is enabling us to take a trust leap – and we are being asked to leap further than ever before. A trust leap happens when we take a risk to do something new or differently to the way we’ve always done it,” she said. 

“A trust leap happens when we take a risk to do something new or differently to the way we’ve always done it. At first, it seems risky. But over time trust leaps become normal and disruption happens.

“Trust is what drives change. Trust is a conduit for ideas to flow.”

Rachel Botsman

As traditional chains of trust move away from institutions and into the hands of individuals, grey areas of privacy, identity and risk emerge. Botsman explained that traditional notions of institutional trust wasn’t designed for the digital age.

“We’re seeing a shift happening from a closed, top-down and centralized expectation to a model which is transparent inclusive and based on real accountability,” she said.

In the digital age, building trust is about increasing the likelihood that things will go right and being there for you when things go wrong. It’s about being competent, reliable and honest.

“The measure of trust is reputation. A reputation is the sum of what a community thinks of you,” Botsman says. “Our online reputation is changing our behaviours in the real world in ways we cannot even imagine. Reputation is going to become a currency more powerful than our credit scores in the real world.”

Conventions of trust are being turned upside down by technology and it means we need to rethink how trust is built and maintained.

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