Strengthen consumers’ digital trust to accelerate the digital economy

It is essential for the Government to develop a culture of security in the digital economy since the online threat landscape has been expanding

85 0
85 0

Published by Focus Malaysia, Astro Awani, Business Today & The Star, image from Focus Malaysia.

AS Malaysia recorded the highest percentage of digital consumers in Southeast Asia (83%), there is an increasing need to strengthen consumer protection and digital trust in the digital economy, as a means to contribute to sustainable and inclusive economic developments.

According to a study conducted by Facebook and Bain & Company, Malaysians were not only spending more online than forecasted in 2019, but also purchasing into more online categories, buying an average of five categories in 2020 compared to four categories in 2019.

And by the end of this year, the Malaysian Digital Economy Corporation (MDEC) expects a 20% growth in e-commerce contribution to the digital economy, as a result of people spending most of their time at home due to the enforcement of movement control order (MCO).

Briefly, as many physical business locations are shut down due to the social distancing measures, blending the physical and digital economy is indeed more important now than before and becoming increasingly relevant and indispensable for both consumers and businesses.

Consumers are now moving to online shopping to satisfy their needs, including those who have been hesitant to do so previously.

As for businesses, apart from making it easier for the new firms to enter the economy, the digital economy has pushed the e-commerce sector into overdrive and allowed them to access new platforms to reach existing consumers as well as a new way to increase market share through effective digital services.

However, it is essential to note the digital economy also poses some challenges for the consumers. Across the region, consumers reportedly do not trust websites to handle their information and are worried if they can be deceived by online sellers and unknowingly buy fake goods.

Thus, there is a need for the Government and businesses to foster and preserve consumer confidence in the digital economy so that the growth of this market will not be hindered due to security reasons or trust issues.

To address this issue, it is becoming imperative to bolster consumer protection in the digital economy.

In line with this, the regulatory power for consumer protection may be assigned either to a single government entity like the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) or through coordination between different government agencies like the Companies Commission of Malaysia (CCM) – by urging them to adopt enforcement tools like internet sweeps in the digital economy environment as well as to set up specialised units for e-commerce.

Another problem that needs to be given an extra attention is the booming of fraud attacks in the digital economy.

Technically, as digital activities are on the rise, companies are working under extreme pressure, and the opportunity level for fraudsters will be sky-high.

According to the experts, the top targets for online fraud in the second quarter of 2020 by industry are online gaming with 65 attacks reported every second, followed by finance and fintech, retail and travel and the last one – the technology industry itself.

Thus, to address this issue, it is essential for the Government to develop a culture of security in the digital economy since the online threat landscape has been expanding.

To achieve this, the Government may want to provide aid – be it in the form of cash or education, for businesses especially the small and medium-sized enterprises (SMEs), to utilise secure tools such as multi-factor authentication, sensitive information encryption and virtual private networks (VPN) for workers and personnel to ensure secured connections wherever possible – since sensitive information is digitally transacted nowadays.

It is also urgent for the Government to re-evaluate its approach in managing fraud. They need a systemic solution that can solve the emerging threats brought on by the acceleration of the digital economy. In the same token, businesses should also assist their customers to protect themselves in the digital world.

This can take the form of upgrading the Royal Malaysian Police’s technology crime/cybercrime investigation (TCI) team into a division in its own right and complementing and supplementing the work of the Commercial Crime Investigation Department (CCID) and Criminal Investigation Department (CID), the Commercial and Cybercrimes Unit of the Attorney General’s Chambers (AGC) among others, to promote awareness and educate the public about cybercrimes and practical ways to beef up cybersecurity, and fend off cyber-criminals.

Nurafifah Suhaimi is Research Assistant at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

In this article