Australian consumers wary of AI, prefer human service touch

Australian consumers remain unconvinced by brands' increasing use of AI for customer service, according to new research conducted by Sinch.

A number of local firms are turning to artificial intelligence to streamline their customer engagement. While companies such as Coles seek to implement AI for seamless customer experiences and CBA has announced a strategic partnership that will bring AI-driven personalisation to its offerings, the study indicates a preference among Australians for traditional, human-led service channels.

Reluctance towards AI

Sinch's State of Customer Communications report, surveying over 600 consumers across Australia, India and Singapore, reveals that Australians are among the least receptive to AI in customer-facing roles compared to other Asia-Pacific markets.

The report highlights a significant trust deficit in AI-powered communications. Only 28% of Australians said they were comfortable with brands using AI to deliver personalised recommendations. Confidence in AI's accuracy is particularly low, with 66% stating they do not trust the accuracy of AI answers. Privacy and security concerns are also prevalent, cited by 41% and 45% of respondents respectively, the latter citing that AI feels "too impersonal".

Fewer than one in three Australians are willing to engage with AI-powered customer support, and in healthcare settings, the figure drops to 16% for those willing to use an AI chatbot provided by a doctor or hospital.

"Australians are sending a strong signal to brands: trust and accuracy are non-negotiable," said Wendy Johnstone, EVP APAC at Sinch. "No matter how advanced the technology, if customers doubt the reliability of AI, they'll disengage. Brands must be transparent about how AI is used and always provide easy access to human support. That's how you build confidence and loyalty in a digital-first world."

Human contact preferred

The appetite for human contact in customer service remains robust, particularly for sensitive or complex matters. The study found that for urgent issues such as fraud, 51% of Australians prefer speaking to a person by phone. When contacted by financial institutions, a majority still opt for email over messaging apps or AI platforms. In the retail sphere, only 4% prefer AI-powered chatbots for pre- or post-purchase support.

Johnstone added: "The human touch simply can't be automated when the stakes are high. But there's an opportunity to blend digital efficiency with genuine empathy. The brands that succeed will be those that use AI for routine tasks, like appointment scheduling or order tracking, while ensuring customers always have a direct line to a real person for anything more complex."

Comparisons across the region

The research positions Australian consumers as notably more cautious than their regional counterparts. For instance, just 36% of Australians are happy to receive real-time order updates from AI, compared with 56% in Singapore and 79% in India. Regarding AI-driven personalisation, 28% of Australians see value in tailored recommendations, but this figure is less than the 47% in Singapore and 79% in India.

These statistics suggest that efforts to roll out AI in customer service must be accompanied by work to develop consumer trust.

"While Australian consumers are rapidly adopting AI in their own lives, they are cautious about businesses using it to engage with them versus their regional counterparts. This has consequences for how local organisations should adopt and roll-out new technologies." said Johnstone

She continues "Not adopting AI is not an option - Aussies need to be taken on a journey and their trust has to be won. This is a critical journey for Australian organisations because how and where you communicate with customers shapes whether they believe you're acting in their best interests. The lesson for Australian brands is it's imperative to build trust first and only then can you turn attention to innovation." said Johnstone.

The findings underline that while AI may increase operational efficiency, the majority of Australian consumers continue to value trust, accuracy and personal interaction as priorities in their dealings with brands.