Insurance providers and financial institutions in Australia and New Zealand are encountering rising customer disengagement linked to complex data collection processes and inconsistent communication strategies, according to a recent study by Smart Communications.
The research, based on a global survey of 3,000 consumers including participants from ANZ, highlighted how digital inefficiencies are prompting consumers to reconsider their relationships with service providers in insurance, healthcare, and financial services.
More than six in 10 Australian (64%) and New Zealand (60%) consumers said they would discontinue interactions with organisations that required overly complicated data intake steps.
This sentiment was notably stronger among younger demographics, with 73% of Millennials and 71% of Generation Z expressing a low tolerance for inefficient onboarding.
While 61% of Australian and 58% of New Zealand participants rated current communications as positive, a larger majority – 84% and 85%, respectively – viewed communication quality as central to their customer experience.
Two-thirds of Australians and 61% of New Zealanders indicated a willingness to switch providers over communication shortcomings.
Leigh Segall, CEO of Smart Communications, said customer expectations are increasingly influenced by digital experiences outside of insurance and finance.
“When healthcare, banking, and insurance organisations fail to meet these expectations, they risk losing customer loyalty and business. That’s why we set out every year to gauge where that bar is set and light the way for organisations in these industries to exceed their customers’ expectations through frictionless, digital-first experiences,” she said, as reported by IT Brief.
Customer trust was closely linked to the consistency of communications across platforms. Fifty-three percent of Australian and 44% of New Zealand respondents reported higher trust in firms offering uniform experiences across multiple channels.
However, only just over half (54%) expressed satisfaction with current omnichannel service delivery.
Communication preferences varied across age groups. Email remained the preferred method among older consumers, while younger segments such as Generation Z were less reliant on email. Traditional print formats attracted the least preference, cited by just 12% of respondents overall.
The report also indicated growing consumer interest in AI-enhanced services. Use cases such as insurance policy recommendations (46% in Australia, 54% in New Zealand) and financial advice were areas where consumers welcomed AI support. Health-related AI suggestions also gained traction.
Despite this interest, concerns about AI persist. Fewer than half of the respondents voiced worries over the security (39% in Australia, 45% in New Zealand) or ethical handling (39% and 44%) of their data.
Confidence in AI-generated communications remained low, with only 15% of Australians and 9% of New Zealanders believing AI tools were more effective than humans in crafting customer-facing content. The majority supported human review of AI outputs.
A separate GlobalData study found that while some insurance customers acknowledged benefits of AI, including faster response times, many remained concerned about data privacy, algorithmic transparency, and fairness.
Segall said organisations have an opportunity to apply AI in ways that are practical and transparent.
“Organisations have an opportunity to use this groundbreaking technology to create outstanding customer experiences that exceed consumer expectations. Our research shows them where to start, by orchestrating smarter omnichannel experiences,” she said.
Data collection forms remain a critical friction point.
Approximately two-thirds of consumers said they would stop using a service if form-filling was overly burdensome.
A majority (90%) prioritised speed and simplicity, while 63% preferred guided digital forms over static PDFs.
Digital submission methods were heavily favoured over manual processes like printing or mailing, especially in Australia (80%) and New Zealand (74%).
Additional research from Arctic Wolf and Snowflake showed that ANZ firms are aligning their tech strategies around both risk mitigation and AI innovation.
Forty-five percent of ANZ business leaders prioritised safeguarding intellectual property and ensuring compliance with data regulations.
The region also reported high exposure to cyber incidents, with 85% of organisations experiencing attacks in the past year – above the global average of 76%.
Ransomware payments were more frequent, with nearly three-quarters of affected entities opting to pay, and 91% using external negotiators.
On the AI front, ANZ firms are increasing spending. Thirty-two percent allocated more than 25% of their technology budgets to generative AI, compared to the 25% global average. Reported returns and decision-making enhancements also exceeded global norms.
