Australians Are Losing Trust in AI
Privacy is quickly becoming a trust issue and for many Australian businesses, a competitive one.
The Office of the Australian Information Commissioner’s (OAIC) recent Australian Community Attitudes to Privacy Survey of 1,504 Australians shows just how much sentiment has shifted. The headline is hard to ignore, 87% of Australians are more concerned about privacy than they were five years ago and 93% say protecting personal information is important to them.
At the same time, trust in AI is lagging behind. Australians are more cautious, sceptical and in many cases, actively questioning how their data is being used.
Let’s break down what’s happening and what your business should do next.
The Trust Gap Is Real… and Growing
There’s a clear disconnect between how organisations use data and how customers feel about it.
On one hand, businesses are investing in AI, automation and data-driven services. On the other, customers are asking tougher questions like “Why are you collecting my data?” “What are you doing with it?” and “Can I challenge the outcome?”
The findings point to a sustained “trust gap” for industries that rely heavily on personal data, especially those adopting AI. And expectations are rising quickly.
AI Is Under the Microscope
The survey also suggests that Australians aren’t actually rejecting AI outright, but they are placing heavier conditions on it.
Users want:
- Transparency – clear explanations of how AI decisions are made
- Human oversight – the ability to challenge or review decisions
- Data boundaries – strict limits on how personal information is used
Specifically, 80% of participants expressed they want limits on how long third-party AI providers retain their data, 76% want strict privacy rules for organisations and AI vendors, 76% don’t want their data used to train external AI systems without consent and 70% want the right to request explanations about AI decisions.
What this means is that your AI systems can’t act like a black box because users won’t trust them, even if the outcomes are accurate.
Privacy Still Matters Even Without Harm
This scrutiny isn’t limited to AI alone, it’s reshaping how people think about privacy more broadly.
One of the biggest mindset shifts is this: privacy expectations now go beyond harm prevention.
- Almost all Australians surveyed (98%) say organisations should be responsible for protecting personal information, even if no harm has occurred
- 77% of people affected by a data breach experienced at least one form of harm
This response tells us something important about user perception, that it matters as much as impact. Even if nothing goes wrong yet, poor data handling can erode trust.
People Will Share Data But On Their Own Terms
Despite the concerns, customers aren’t shutting the door on data sharing.
In fact, 92% says data collection is acceptable under the right conditions.
The top conditions mentioned are:
- Clear purpose (69%)
- Consent or opt-in (68%)
- Only collecting what’s necessary (66%)
- The ability to opt out (61%)
But here’s the catch. 69% of people admit they often agree to privacy policies without reading them. That means businesses can’t rely on legal fine print to build trust. Users are judging based on experience, transparency and reputation with little to no consideration towards your policy wording.
So, What’s The Takeaway?
The results of the survey conveys a clear shift in how users perceive data protection and organisational responsibility. Trust is no longer assumed, it’s evaluated. If people lack confidence in their data security, they’re far less likely to engage, making trust a key differentiator for businesses.
At the same time, the growing use of AI is redefining accountability. AI doesn’t cut down responsibility, it intensifies it. Organisations are still fully accountable for how data is collected, processed and shared, including when third-party tools are involved.
This shift also signals the end of “good enough” privacy practices. Basic compliance alone is no longer sufficient to meet customer expectations. Users are looking for greater clarity, more control over their data and a stronger sense of fairness in how it is used. Businesses that move beyond baseline compliance and actively prioritise these elements will be better positioned to build lasting trust.
What Your Team Should Be Doing Right Now
Start with a simple audit of what data you hold, where it flows and which systems, especially AI tools, interact with it. From there, make sure you can clearly explain why you collect that data, how it’s used and who it’s shared with, including third parties in your supply chain.
Next, strengthen transparency by ensuring there’s a pathway for human review and tighten control over external vendors. If you can’t confidently explain these processes to a customer, that’s your signal to act. Privacy expectations are only increasing. Organisations that succeed will be those that can clearly justify and stand behind how they use data and AI. As mentioned before, trust now has to be earned, not assumed.
How Diamond IT Can Help
If you’re unsure where your risks sit, the first step is getting visibility. A structured AI and Data Risk Discovery can help you map data flow, identify gaps and prioritise what to address first, so you’re not just reacting to growing expectations but staying ahead of them.
Reach out to our team via email at enquiries@diamondit.com.au, call 1300 307 907 or fill out the form below.
