Survey: SG SMEs' knowledge of AI risks declines as cybersecurity concerns grow

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Despite over half (52%) of SMEs in Singapore revealing that AI has significant impact on business productivity, knowledge on its risks is declining. This is according to a recent study by QBE Singapore. AI concerns regarding its risks are also more widespread than in previous years.

Largely, 68% of respondents cited the threat of AI replacing jobs, with around 25% foreseeing jobs in customer service, finance and accounting to be fully replaced within three years. Meanwhile, 22% expect roles in routine manual work and labour-intensive tasks to be fully replaced after six years.

Interestingly, 55% of SME professionals don't believe AI replacing the jobs in their respective companies.

Don't miss: Brands in SG are falling behind in AI adoption

Aside from job replacement, 66% of SME leaders are concerned about AI-related privacy concerns with 51% anxious about AI-linked security branches. This is compared to 15% a year earlier.

While awareness of the pitfalls of AI is on the rise, knowledge of cyber risks is declining. The study found that 40% of Singaporean SMEs believe they are fully informed of the risks. This is down from 47% in 2025. This may be one reason behind the proportion of business experiencing a slight increase in cyber events (25% to 27% year-on-year), said the survey.

Other challenges SMEs are concerned with are increased costs and reduced profitability (66%), growing sales and reduced customer spending (56%) and difficulties in managing cash flow and access to funding (51%).

Accordingly, the economic outlook for the next 12 months is also less positive than a year ago. Only 52% of respondents believe this year will be better than the past 12 months, versus 60% last year. Meanwhile 70% feel that increasing operating costs will impact the economy negatively and 60% note that rising inflation and a GST increase will also impact the economy.

SME executives are similarly downbeat about the performance of their respective businesses too. In the 2024 survey, 62% of respondents believed sales during the ensuing year would be better, compared to 55% this year.

"While there is much concern over the state of the economy and their own prospects in the future, businesses aren't standing still," said Shun Quan Goh, head, underwriting, retail and SME, QBE Singapore.

"The proportion of respondents taking action to tackle today's conditions has increased. This is notably the case with cost control, diversification of customer base, and business streamlining — some 70%, 49%, and 40% of respondents having acted on these fronts to ensure business viability," he added.

Upskilling SMEs in AI have been a key focus in recent years. In December last year, DBS, in partnership with Enterprise Singapore (EnterpriseSG) and the Infocomm Media Development Authority (IMDA), launched a strategic public-private partnership which aims to drive wider GenAI awareness and adoption of GenAI solutions among Singapore’s SMEs.

This is especially since only about 4.2% of SMEs in Singapore have adopted some form of AI technology. To address the gap, Spark GenAI was developed to help SMEs understand how GenAI solutions can help to solve business challenges. DBS aims to reach out to 50,000 local SMEs over the next two years, equipping them with actionable insights and hands-on guidance to integrate GenAI into their operations and drive tangible outcomes.

Spark GenAI offers SMEs a structured, simplified approach to discover potential use cases and practical applications of GenAI solutions into their business operations in areas such as customer engagement and marketing. The programme comprises four pillars including discovering use cases and benefits of GenAi, identifying specific business needs, adopting the solutions and strengthening digital resilience with cyber insurance and a cyber wellness course.

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