Singapore’s small and medium enterprises (SMEs) are still hesitant to adopt digital technology and lack action in strengthening their business’s infrastructure, despite an increasingly digitised economy.
That is according to the fifth edition of QBE Insurance’s annual survey of Singapore SMEs, which found that while SMEs are keen to digitalise, over four in 10 (41%) cited high investment costs as the main deterrent. The second most-cited reason was the lack of financing and funds. The majority (57%) of respondents said that financial support from the government was a key form of support needed to help lift the barriers to digitalising.
While measures announced in Singapore’s 2020 Budget will help SMEs access more working capital, and potentially further digitalise their businesses, more needs to be done in outreach and education around these assistance measures, the insurer’s report said. The survey results revealed that only 31% of SMEs have utilised the government support available in 2019. This was despite 71% indicating their awareness of support measures, revealing a significant gap between awareness and uptake.
Another finding that highlighted the unpreparedness of SMEs in dealing with risks associated with a digital economy was the low uptake of cyber insurance. Only 17% of surveyed businesses held insurance against unauthorised access of their computer systems or networks, despite 34% of companies having expressed concern over this risk.
Similarly, just 19% of businesses have protection for theft of sensitive data and information via the internet, despite 37% expressing concern. Furthermore, only 18% and 16% of SMEs held insurance for customer fraud and fraudulent payments via the internet and infringement of intellectual property rights respectively, two issues which the report identified as growing in significance in the digital economy.
According to QBE, Singapore’s SMEs are moving towards a digitalised economy, but they lack contingency planning in dealing with the risks they face – a finding that has been noted in previous editions of the survey.
“SMEs are the key driving force for Singapore’s economy. It is therefore critical for them to understand the importance of digitalising and scaling up to become more competitive in the marketplace,” said Ronak Shah, CEO of QBE Insurance Singapore. “Assistance provided by the government, especially more so in the recent Budget announcement, should provide SMEs with the resources to establish proper contingency plans. This helps to ensure that their overall long-term growth is both sustainable and safe.
“As insurers, we reach out and become partners to local SMEs, giving them the confidence to navigate an unpredictable economy through identifying and underwriting risks specific to their needs.”
