What are digital trust and safety solutions?

Digital trust and safety solutions are technologies and services that help online platforms protect their users. This includes identity verification to confirm users are who they say they are, content moderation to remove harmful material, age verification to protect minors, and cybersecurity tools to prevent data breaches and cyber attacks.

Why are these companies important after the Meta VR allegations?

The whistleblower allegations about child safety in Meta's VR products have highlighted how tech companies can face serious reputational and regulatory risks if they don't adequately protect users. This creates strong demand for companies that provide the tools and services needed to build safer digital environments.

What does 'secular growth trend' mean in investing?

A secular growth trend refers to a long-term pattern of increasing demand that isn't dependent on economic cycles. In this case, the need for digital safety solutions is expected to grow consistently over many years as more of our lives move online and regulations become stricter, regardless of whether the economy is doing well or poorly.

How do regulatory pressures affect these investments?

Increasing regulatory pressure on tech companies to protect users creates more demand for digital safety solutions. When governments require stricter safety measures, online platforms must invest in identity verification, content moderation, and cybersecurity services, which benefits the companies providing these solutions.

What is identity verification and why is it important?

Identity verification is the process of confirming that users are who they claim to be when they sign up for online services. This is crucial for preventing fraud, protecting minors from accessing inappropriate content, and ensuring platforms can comply with regulations that require knowing their users' real identities.

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Digital Trust & Safety Investing Explained

Following whistleblower allegations that Meta ignored child safety risks in its VR products, the tech industry is facing intense pressure to better protect its users. This creates an investment opportunity in companies that provide essential digital safety solutions, such as identity verification and content moderation.

Han Tan | Market Analyst

Updated today | Published at September 10