APAC companies in nascent stages of digitalisation despite strategies in place: DBS

SEVERAL companies in Asia-Pacific (Apac) remain in nascent stages of developing and implementing their digital strategies, according to the latest findings of DBS's Digital Readiness Survey released on Tuesday.

Out of the 2,600 corporate treasurers, chief executives, chief financial officers and business owners surveyed in the region as well as the US and UK, the survey found that 70 per cent of large corporates across 13 markets in Apac had a digital transformation strategy in place.

Taiwan led the way at 95 per cent, followed by Singapore and China at 91 per cent and 87 per cent, respectively.

DBS noted that the overall survey data represented a marked increase from the previous year, where the proportion of Apac businesses with a digital strategy was only 57 per cent.

Yet, a significant 54 per cent of large corporates and middle-market companies in the region indicated that they were just starting to develop their digital roadmaps, or that their current plans remain underdeveloped.

Small and medium-sized enterprises (SMEs) in Apac lagged further behind their peers. Only 41 per cent of 1,000 SMEs surveyed said they had a digital transformation plan in place, led by those in Singapore at 72 per cent.

According to the survey findings, an overwhelming 97 per cent of businesses in the region said they were facing external pressure to transform digitally.

Key challenges for large corporates and middle-market companies included the speed of change and complexity in the enabling technologies, execution complexity, and the lack of available digital talent. The region's SMEs faced a slightly different set of hurdles when it came to digital adoption, such as the high costs of adopting new technology and cybersecurity concerns.

The survey also found that SMEs in Apac tend to prioritise digital investments in sales and distribution channels, trade and supply chain finance, and procurement.

In contrast, large corporate and middle-market companies cite that trade and supply chain financing, ongoing cash management, and sales and distribution channels such as e-commerce storefronts were the top three most significant areas of digital investment.

In its press release on the latest survey findings, DBS said it expects the trending use of application programming interfaces (APIs) and smart contracts to continue gaining traction among the region's businesses, large and small. The bank is anticipating API connectivity with banks to flourish over the next 12 months, with 56 per cent of SMEs and 65 per cent of their larger peers looking to adopt APIs in their banking connections.