As Southeast Asia’s digital economy hurtles toward maturity, the region’s SMEs have reached a definitive structural tipping point. In just twelve months, the adoption of digital financial tools has surged from 38% to 57%, signalling a fundamental shift where digital infrastructure is no longer an elective advantage but a core survival requirement. Yet, this rapid transition is fraught with friction: 49% of SMEs still cite high costs as a primary barrier to adoption, and less than half feel satisfied with their current legacy-burdened setups. For a sector that powers the backbone of ASEAN commerce, the “inflection point” is clear: businesses must now choose between scaling through fragmented manual systems or evolving into leaner, tech-native enterprises.
One of the pioneers of this change is Airwallex, the global financial platform, trying to upend the traditional barriers to borderless commerce. By leveraging its extensive network of over 80 licenses globally, the company is transitioning SMEs away from the rigid, high-fee environments of traditional banking, where only 35% of firms now seek funding, toward a unified, software-led ecosystem. As businesses look to expand more while spending less, with spending intent dropping from 76% to 58% despite ambitious growth plans, Airwallex has doubled down on providing the “plug-and-play” infrastructure that allows a Singaporean SME to capture the Malaysian market (the top target for 2026 at 36%) without the overhead of localised legal or physical footprints.
The secret sauce of this evolution lies in the shift from simply “layering” technology to “embedding” autonomous intelligence directly into the financial workflow. This feature explores how the next frontier of digital efficiency isn’t just about faster payments, but about AI-driven procurement and reconciliation systems that run with minimal human intervention. We sit down with Lionel Tan, Head of SME & Growth, Singapore, at Airwallex to discuss the strategic rise of Malaysia as a regional powerhouse, the necessity of end-to-end financial infrastructure, and why the future of Southeast Asian growth depends on turning complex compliance into a competitive edge.
Adoption of digital financial tools has jumped from 38% to 57% in just one year. Is this a permanent “tipping point” for SME infrastructure?
A jump from 38% to 57% in a single year points to something structural rather than a temporary spike. Digital financial tools are no longer seen as optional – they are becoming core infrastructure for how SMEs operate.
We’re seeing this with our own customers. Businesses expanding across borders can’t afford to rely on fragmented, manual systems. With the foundations now in place, the next phase will be deeper integration – where financial tools are embedded into day-to-day operations, not layered on top.
With 49% of SMEs citing high costs as a barrier to tech adoption, how do businesses justify the spend when only 44% feel “satisfied” with their current setup?
Many businesses remain unsatisfied because they’re still running on legacy systems that weren’t built for the complexity of operating across multiple markets. They end up paying for tools that slow them down rather than help them grow.
The case for investing in better technology comes down to efficiency and control. Moving to a unified, software-led platform removes unnecessary intermediaries, reduces errors, and frees up time for finance teams to focus on higher-value work.
That’s why more SMEs are shifting towards end-to-end financial infrastructure that can support their full operations – from accepting payments to managing funds and making cross-border payouts. It gives them the speed, visibility and control needed to scale effectively.
53% of SMEs are using technology specifically to optimise operations. Beyond payments, what is the next frontier for this digital efficiency?
The next frontier is how businesses manage money internally through more autonomous financial systems. Processes like procurement, reconciliation and spend management are still largely manual for many SMEs, and that’s where AI can make a meaningful difference.
There’s also an important distinction between using AI and restructuring around it. Many businesses are layering AI onto existing workflows and seeing incremental gains, but the bigger shift comes when AI becomes a core driver of how work gets done.
In practice, that means routine financial tasks running with far less human intervention, with finance teams focusing more on oversight and strategic decision-making. That’s the direction we’re building towards – embedding intelligence directly into the daily financial workflows of our customers.
Interest in Southeast Asia has grown to 46%. Why has Malaysia (36%) emerged as the undisputed top target for 2026?
Malaysia has emerged as a natural first move for many Singapore SMEs, with interest building steadily. In our survey last year, it was already the top expansion destination at 26%, rising further to 36% this year. Trade ties between Singapore and Malaysia are well established, proximity keeps logistics manageable, and execution risk is lower than in more distant markets.
More broadly, businesses are approaching expansion more deliberately – prioritising markets where they already have some footing rather than spreading themselves too thin. Our role is to ensure the financial infrastructure is ready when they get there, so entry is fast, cost-efficient, and scalable.
While 97% of SMEs plan to expand within 18 months, the number of firms planning to increase spending has dropped from 76% to 58%. How can they expand more while spending less?
Technology is enabling SMEs to expand without a proportional increase in spend. Today, businesses can enter new markets without building large local teams or setting up separate bank accounts in each country.
By connecting to local payment networks and managing everything through a single platform, they avoid much of the overhead that regional expansion traditionally required. That’s what allows them to grow more efficiently, and it’s where we’re focused – making that kind of infrastructure accessible to businesses at any stage of growth.
44% of firms cite legal and compliance barriers as their primary overseas challenge. Are current government support programs doing enough to lower these specific walls?
Government support does play a role, and the fact that 70% of Singapore SMEs view it as sufficient is a positive signal. That said, compliance complexity doesn’t disappear just because support programmes exist. Every market has its own regulatory framework, and keeping up with that can be a real burden for SMEs without dedicated legal or compliance teams.
This is where infrastructure matters. With over 80 licences globally, Airwallex is able to handle local compliance requirements on behalf of our customers. That allows businesses to focus on growth, while we take care of what it takes to operate compliantly in each market.
50% of SMEs are turning to investors and 47% to reinvest profits to fund expansion. Why are only 35% opting for traditional bank loans?
Traditional bank loans often don’t match the speed SMEs need to operate. Lengthy approvals and rigid conditions make it harder to act on growth opportunities, so many choose to retain control through investors or reinvest profits.
There’s also a practical challenge. Expanding across markets often means setting up multiple local accounts and dealing with slow settlement times, which creates friction in day-to-day operations. As a result, businesses are turning to more flexible, integrated solutions that let them move funds quickly and manage everything in one place.