Survey: HK SMEs expect AI to replace human roles in marketing, but not until 2031

A majority of Hong Kong SMEs expect artificial intelligence (AI) to replace human roles in sales and marketing, but not until after 2031, a QBE Insurance survey finds.

Conducted from November 2024 to January 2025, the annual QBE Hong Kong SME survey gathered insights from 600 decision-makers on a wide range of business risks and opportunities, including the impacts of artificial intelligence (AI), cyber risks, and their appetite for insurance digitalisation.

This year, 57% of respondents said they were using the technology, up from 55% 12 months ago. Despite this, 57% also don't believe AI will replace jobs in their respective companies any time soon. However, almost half of respondents (47%) view AI as a threat to business, up from 31% last year. The main concerns include privacy issues and job loss (69%), with 52% citing security worries.

According to the survey, many believe AI will mainly replace human roles in customer service, human resources, and sales and marketing, but not until after 2031.

Interestingly, over half of SMEs say they are fully informed of cyber risks, with 43% saying they are somewhat informed, up from 48% and 41% respectively. Despite this, the proportion of businesses experiencing a cyber event rose from 30% in 2024 to 33% this year. Meanwhile, this year's survey saw a fall in the proportion of businesses using cyber security solutions and software (down from 62% to 60%), staff training (45% to 43%), and cyber resilience consultants (42% to 36%). The rise in cyber events among businesses might be the result of Hong Kong SMEs retracting on cyber protection activities.

While businesses may be reducing investment in these areas, they are however spending in other areas. The percentage of Hong Kong SMEs hiring dedicated cyber security staff rose from 43% to 49% over the past year, while those purchasing cyber insurance increased from 39% to 43%. The top three drivers for purchasing coverage this year include paying for legal services, hiring security or forensics experts, and covering data breach costs.

Of the 62% of respondents who do not have any form of cyber insurance, 63% would consider purchasing it, while 11% would categorically not consider it. Potential reasons include cost; the fact that their business doesn't store data; and the perceived low impact of such events on their businesses.

Andex Fung, head of SME segment, Asia at QBE, said: "It's heartening to see Hong Kong SMEs heighten both their knowledge as well as protection measures against cyber-attacks. The interdependency across sectors and businesses makes such risks unavoidable and the increased awareness of local SMEs demonstrates the role insurers like us can play in furthering their know-how and supporting their risk management in the current cyber risk landscape.”

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In terms of business challenges facing Hong Kong SMEs, the percentage experiencing increased costs and lower profitability rose from 40% last year to nearly 60% this year. Similarly, around half are challenged with both talent and labour shortages, as well as financial issues such as cash flow shortfalls and limited access to funding, compared to 39% and 34% respectively last year. Challenges have increased across eight different categories year-on-year.

Echoing these findings, the economic outlook for the next 12 months is less positive than a year ago. Some 64% of respondents believe this year will be better economically than the past 12 months, versus 70% last year. Among several drivers of this viewpoint, 74% of today's SMEs are experiencing deteriorating investor and customer confidence, up from just 63% last year. Survey respondents are equally as pessimistic about the performance of their respective companies: in the 2024 survey, 70% of respondents believed sales during the ensuing year would be better, compared to 65% in this year's edition.

"Despite today's difficult conditions, businesses are rising to the challenge. Over the past few years, Hong Kong SMEs have become more resilient to the myriad of challenges ahead of them, and continue to roll out measures designed to meet these. Three-quarters of Hong Kong SMEs have taken cost control measures, while 45% of respondents have streamlined their operations, and 42% have diversified their offerings. We believe these actions underscore the ability of local businesses to respond and adapt," Fung added. 

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