How are SMEs strategically investing in technology?

Instarem, part of Nium, South-east Asia’s payments unicorn, has launched its 2024 SME Spend Barometer, shedding light on the spending behaviours of small and medium-sized enterprises (SMEs) in Singapore, Australia, and Malaysia.

The report, based on data from 700 SMEs and several qualitative interviews with customers, analysed spending patterns from January 2023 to August 2024. It highlighted how SMEs are strategically investing in technology, infrastructure, and talent to adapt to a rapidly evolving economic environment.

Export payments across Malaysia and Australia saw a 6 per cent increase, reflecting a cautious yet optimistic approach to global expansion. However, Singapore experienced a sharp 27 per cent year-on-year decline in export payments, suggesting a shift in focus towards domestic priorities amid rising costs and economic pressures.

Yogesh Sangle, global head of Instarem, said: “Instarem has supported thousands of businesses in their growth journeys over the years.

“Expanding overseas allows SMEs to tap into broader customer bases and unlock market opportunities to achieve scale and growth. While a degree of caution is understandable in today’s climate, we anticipate that SMEs will continue to identify and seize opportunities that align with their goals.”

Digital transformation and AI adoption are accelerating across the Asia-Pacific region, with spending on information services rising by 29 per cent compared to the same period in 2023.

Malaysia and Australia are leading in IT investments, particularly in sectors such as food and beverage (+120 per cent), IT and software services (+66 per cent), and business consultancy (+59 per cent). SMEs are increasingly turning to digital tools, AI, and automation to tackle rising costs and improve operational efficiency.

Many are adopting workflow automation, AI-driven fraud detection, and advanced data analytics, among other technologies, to streamline operations, reduce manual work, and optimise resources. However, not all sectors are embracing technology at the same pace.

The financial services and business services sectors have scaled back on information services spending, with decreases of 42 per cent and 4 per cent, respectively.

Following years of hybrid or remote work, SME employers across Singapore, Australia, and Malaysia are reinvesting in physical infrastructure.

Office expenses have grown by 16 per cent, with some sectors, including retail and wholesale, as well as business services, seeing significant increases.

Office expenses in these sectors have risen by nearly 150 per cent and 70 per cent, respectively, pointing to a shift in how businesses are positioning themselves for long-term growth. This increased demand for commercial real estate also led to a more than doubling of transaction volumes in real estate and leasing, up by 107 per cent from 2023–24.

However, this trend is not universal. Some sectors, such as industrial manufacturing and construction (-48 per cent), online retail (-44 per cent), and telecommunications (-28 per cent), have taken a more cautious approach to physical infrastructure investments, prioritising specific market needs.

“Employee demand for in-office collaboration has driven our decision to invest in physical office spaces in the Philippines and Vietnam. Balancing these investments with our offshoring model allows us to better manage costs while fostering greater collaboration and innovation,” said George Votava, group managing director at Net Fusion Technology.

The findings from the SME Spend Barometer have shown that SMEs are focused on high-impact investments, such as digital transformation, while adopting more cautious strategies in other areas.

However, challenges like fluctuating exchange rates and high processing fees continued to put pressure on resources.

“Managing costs is a top priority for SMEs, particularly in critical areas like talent and expansion,” Sangle said.

“Thinking strategically about payments can not only help to reduce high cross-border fees and improve cash flow – it can free up crucial resources for growth and set SMEs up for long-term success.”

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.