Kiwis lose trust in AI as preference for human service prevails

Research from Qualtrics has shown a significant decline in trust among New Zealand consumers regarding companies' responsible use of artificial intelligence, with only 18% expressing confidence in organisations-one of the lowest rates globally.

Findings from the fifth annual Qualtrics Consumer Experience Trends report highlight that New Zealanders are increasingly wary of how AI is used in customer service, with 62%-the highest figure worldwide-expressing concern that automated interactions will prevent them from connecting with a human representative.

Impact on spending

The report reveals that this lack of trust is translating into commercial risk for businesses. Nearly half (45%) of New Zealand consumers have reduced spending following poor experiences with AI-driven services. This suggests that widespread adoption of automation may be undermining customer loyalty in key areas, particularly when interactions are unsatisfactory.

Ivana Papanicolaou, Head of Customer Experience Solution Strategy, ANZ at Qualtrics, said the trend should not be attributed to general reluctance to engage with technology, but rather to a transparent preference for personal, human interactions. She stated:

"Too many companies are deploying AI to cut costs, not to solve problems, and Kiwis know the difference. New Zealand 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."

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 New Zealanders about its value."

Hesitancy and concerns

The study, which encompassed surveys from over 20,000 consumers across 14 countries, including 1,000 participants in New Zealand, also found that 59% of New Zealanders are worried about the misuse of their data in AI-powered customer interactions. This cautious stance was paired with 58% indicating a desire for brands to tailor their experiences, although only 30% believe the benefits are worth potential privacy trade-offs.

Fifty percent of New Zealand respondents preferred in-person or telephone engagement for routine activities, rather than digital channels such as AI assistants or live chat services. This indicates ongoing hesitancy in adopting automated customer service, even as businesses look to technology to increase efficiency.

Declining feedback

Another challenge identified by the survey is consumer feedback. A notable proportion of New Zealanders are not communicating their experiences directly to companies. Approximately 26% do not share positive experiences, while 29% remain silent after negative ones. This trend complicates efforts to address customer churn, as companies may remain unaware of the underlying drivers of consumer behaviour.

Papanicolaou commented:

"When consumers don't share their experiences, organisations lose a really valuable source of intel. Silence isn't apathy, its 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."

Loyalty beyond price

The report found that 29% of New Zealand consumers have reduced their spending this year due to economic pressures, compared to 19% globally. However, New Zealanders who choose brands based on customer service, rather than price alone, report higher satisfaction and trust rates-92% and 90%, respectively.

Papanicolaou noted:

"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."

Privacy and control

Concerns over data security are significant among New Zealanders, with only a third trusting companies to manage their personal information responsibly. Sixty percent worry about the security of their data, while fears of fraud and hacking are also prevalent, at 35% and 25%, respectively. Over half (53%) of those surveyed said they would be willing to share more data if businesses offered greater transparency about what was being collected, and 52% want better control over how their information is used or deleted.

Papanicolaou said:

"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."

The Qualtrics report captures a shift in consumer expectations, indicating that New Zealanders are prioritising trust, transparency, and personal connection over automation as companies continue to integrate AI into customer service operations.