New research from Commonwealth Bank of Australia (CBA) and YouGov has shown that AI transformation is firmly on the agenda for small-to-medium businesses (SMEs), with 59% having invested in or planning to invest in AI within the next five years,

The study found that younger business leaders, particularly those from Gen Z and millennial demographics, are more likely to report investment or intent to invest in AI, with 75% showing interest compared to 55% of Gen X and 45% of baby boomers or older. A significant 87% of SMEs who have already introduced AI into their operations report cost and time savings.

"In response to market challenges, Australian SMEs are innovating and investing in new technologies with many already seeing the real-time benefits of integrating AI into their operations to help improve productivity and profitability, as well as enhance their competitive edge," said CBA's Executive General Manager Small Business Banking, Rebecca Warren.

The research also highlighted barriers to AI adoption, with 80% of SMEs citing challenges such as data security concerns (33%), a lack of comprehension and knowledge about AI (28%), and limited financial resources (26%).

"We know that AI itself is rapidly advancing, with its capabilities growing and expanding exponentially. There is also a need to provide more education and insights to help small business owners and workers understand how AI applies to them and how it can get their business working smarter and faster," Warren said.

The most common reasons driving the demand for AI are improving efficiency/productivity (66%), spending less time on manual/routine activities and more time on value-adding activities (46%), and improving profitability (38%). The most common areas many SMEs have begun trialling AI are for content creation and editing (48%), idea generation (39%), and automation of routine activities (33%).

"At CBA, AI is helping us protect our customers from scams, detect abuse in transaction descriptions and make it easier for our teams to navigate complex customer queries," Warren said.

In response to these findings, CBA plans to launch a new resource to help small businesses fast track their AI capabilities and unlock new areas of growth.