Singapore businesses have a “cautious” economic outlook, as new data from global fintech Airwallex reveals 7 in 10 small and medium-sized enterprises (SMEs) here are “bracing for a potential recession within the next two years.”
The independent research “considered the challenges SMEs in Singapore would face amid the current economic uncertainty, how they would get around them, and how fintechs could support their future growth.”
SMEs look “to optimize operations with technology and fiscal discipline to manage rising costs.”
Rising costs is “among the top 3 pain points for two-thirds of Singapore SMEs.”
Rising costs “from suppliers (35%) accounts for the highest rise in business cost, followed by employee costs (30%) and logistical disruption costs (23 per cent) likely due to the pandemic.”
Low Cher Hao, Director, SME and Growth, Singapore, at Airwallex, said:
“The challenges identified by SMEs in the survey findings are consistent with what we have been hearing from our customers, with rising costs and ways to manage it being a consistent theme in conversations.”
To optimize their operations amid an increasingly uncertain environment, SMEs are “taking a prudent approach to their financial spending, with nearly two-thirds looking to reduce business spending and/or optimize operations through technology in the next 6-12 months. Improving efficiency (42%), growing revenue (40%), and market share (33 per cent) were the top three priorities for SMEs surveyed.”
Cher Hao added:
“SMEs contribute significantly to Singapore’s economy and the findings emphasises the need for better solutions to manage their top concerns and encourage their growth and success.”
As noted in the update, trust in fintech and digital platforms and willingness to adopt are high.
While SMEs continue to maintain a high level of confidence in traditional banking providers, the survey found “that 93% of businesses in Singapore hold a high level of trust in fintech and digital platforms to support their business activities.”
More than 9 in 10 SMEs “have already adopted or are planning to adopt digital or fintech solutions to support their businesses’ financial needs.”
The clear benefits of going digital “include saving time (58%), ease of access (50 per cent) and greater control over transactions (48%).”
Amid a challenging economic environment, businesses in Singapore “retain a strong appetite for growth and expansion.”
The survey found “that nearly two-thirds (64 per cent) of SMEs plan to expand their business overseas in the next 12 months. Southeast Asia remains a top expansion region, with almost one in two SMEs (43 %) looking to expand across the region.”
The top five favored markets for expansion “include Malaysia, the Netherlands, Indonesia, Vietnam and the Philippines.”
Cher Hao commented:
“Singaporean businesses are entrepreneurial. They are constantly looking for ways to globalise their products and services. We see ourselves playing a critical role in helping them achieve their international ambitions. Over a thousand SMEs in Singapore trust Airwallex to support the financial needs of their business; we are looking to empower them further, and welcome more like-minded businesses to join us.”
