Australians demand human touch as trust in AI & data use wanes

New research indicates Australian consumers have become among the world's most cautious when it comes to trusting companies' use of artificial intelligence, prioritising human connection and transparency over automation.

The 2026 Qualtrics Consumer Experience Trends report, drawing insights from over 20,000 consumers globally-including 1,502 from Australia-shows that only 23% of Australians trust organisations to use AI responsibly. This figure is significantly lower than the worldwide average of 29%.

The research also finds that 58% of Australian respondents worry that automated AI interactions will prevent them from being able to connect with a human, an indication of the importance Australians place on direct engagement in customer service.

Ivana Papanicolaou, Head of Customer Experience Solution Strategy, ANZ at Qualtrics, commented on the findings, stating, "Too many companies are deploying AI to cut costs, not to solve problems, and Aussies know the difference. Australian consumers are no doubt a hard group to win over. Their stark preference for human interactions is a reminder of just how critical human connection is for customer experience."

Pressure is rising on businesses to show clear returns from AI investments. Yet, according to the report, attempts to scale service standards with AI are often not meeting expectations. The data indicates that bad AI experiences are having tangible impacts on business. Forty-one percent of consumers surveyed reported that a poor AI interaction led them to cut back on spending with a brand, whereas positive experiences were linked to greater customer loyalty.

Papanicolaou added, "AI needs to be used to improve service, build connections and enhance the human experience, not replace it. It should empower human agents with the right context and suggested solutions so they can resolve complex customer problems quickly and effectively. But there's more we need to do to educate Aussies about its value."

AI hesitancy and data fears

The report details that more than half (56%) of Australians are concerned about the potential misuse of data if companies use AI for customer interactions. Moreover, Australians are more inclined to prefer in-person meetings or phone conversations over alternatives such as AI assistants or live chat, with 51% indicating this preference across eight common activities studied.

Data privacy remains a key concern, with only 37% of Australian respondents expressing trust in companies to use their personal data responsibly, while 66% remain apprehensive about the security of their personal data. The most commonly cited worries include the threat of fraud or scams (34%) and hacking (29%).

Declining direct feedback

The report also highlights a shift in how consumers communicate with brands, noting a degree of survey fatigue. Direct sharing of feedback is in decline; 27% of surveyed Australians take no action after a good experience, while 31% provide no response after a bad one. Globally, this lack of direct feedback is echoed with 30% of respondents failing to provide feedback after a poor experience and 25% after a good one.

This pattern means businesses may find it increasingly difficult to understand the drivers behind customer dissatisfaction or attrition. Communication problems remain a primary issue, with 42% of Australians citing them as a reason for a negative experience.

However, consumers are still sharing their opinions through less direct channels-calls, chats, online reviews, and social media. Papanicolaou explained, "When consumers don't share their experiences, organisations lose a really valuable source of intel. Silence isn't apathy, it's abandonment, and so leaders need to be connecting data across experience, operational and behavioural to uncover insights, solve problems and address customer pain points, in lieu of verbal and more direct feedback."

The role of value and service in loyalty

Australia and New Zealand were found to be the most price-sensitive markets in the research, with 29% of Australians reducing overall spending this year, compared to a global average of 19%. Despite the ongoing economic pressures, customer service remains a major influence on brand loyalty.

Australians who base their purchasing decisions on customer service report a 93% satisfaction rate and a 90% trust rate, which the report notes is higher than those who choose brands based on value alone.

"Competing on price might win customers in the short term, but differentiation based solely on price is a losing battle. The organisations leading from the front are building customer connections through exceptional experiences that create lasting impressions competitors cannot replicate," Papanicolaou said.

Transparency in data practices

The study shows that 61% of Australians want to buy from brands that personalise their experience, but only 36% believe the advantages of personalisation are worth potential privacy risks. Almost half (46%) of respondents would be willing to share more data if there was greater transparency about what was collected, and 44% desire better control over how their data is used or deleted.

Papanicolaou concluded, "This presents both a challenge and an opportunity for organisations: they must show clear, tangible benefits when requesting personal information and stop asking for more information than they need. Transparency when it comes to customer data shouldn't be optional, there needs to be clarity about how that data is collected and used."