Finance and insurance small and medium-sized enterprises (SMEs) are using artificial intelligence at higher rates than many other sectors in Australia, according to new research from National Australia Bank (NAB). NAB’s latest SME Business Insights report, Embracing AI, finds that AI use is now embedded in a sizeable share of the SME sector, but adoption patterns differ sharply by industry and by business function. Across all industries, 42% of SMEs report using AI, 44% say they do not use it, and 14% plan to adopt it. The figures depict an SME population split between users and non-users, with a notable group indicating short‑term intentions to implement AI tools.
The report identifies sectors with heavy data use and more established digital systems as those with the highest reported AI adoption. Property services records an adoption rate of 69%, followed by finance and insurance at 64% and business services at 61%, all above the SME average. In finance and insurance, 65% of SMEs that use AI report applying it in operations and logistics. The survey also shows that 29% of finance and insurance SMEs nominate cost reduction and efficiency as their main perceived AI opportunity, the highest proportion of any industry. Respondents link this to regulatory requirements, labour-intensive workflows, and administrative tasks that can be partially automated or supported by AI-based tools.
NAB group executive for digital, data & AI Pete Steel said the findings indicate a move from exploration to more systematic use of AI in SME operations. “We’re seeing a clear shift from curiosity to practical use, with more businesses using AI to save time, reduce admin burdens, and make better decisions. Unlocking this adoption at scale across the economy has real potential to help Australia increase productivity and lift our global competitiveness,” Steel said.
While some industries are integrating AI into everyday activities, the report highlights large differences between sectors with strong digital capability and those where take-up is slower. Accommodation, cafes, and restaurants report a 50% AI adoption rate. Wholesale, retail, manufacturing, and construction also indicate considerable use of AI in areas such as marketing and sales, albeit from different bases and for different purposes.
At the lower end, transport and storage reports an adoption rate of 21%, retail 22%, and manufacturing 35%. These sectors also record high levels of non-use: 64% of retail SMEs say they are not using AI, along with 58% in transport and storage and 54% in manufacturing. The report notes that features such as legacy systems, narrow operating margins, and fragmented supply chains can influence the speed and feasibility of adopting new technologies.
Across all SMEs surveyed, 16% say they do not expect AI to benefit their business. The research associates this with doubts about practical value, limited digital capability, and concerns related to data protection, ethics, and workforce impact. These differences suggest that AI-related risk and readiness will vary substantially by client segment. Firms in more digital and data-intensive industries may present more structured data sets and automated workflows, whereas businesses in lower-adoption sectors may need more support in understanding AI-related exposures, governance requirements, and integration challenges.
NAB’s analysis shows that SME AI use is concentrated in a few key business functions. Among SMEs already using AI, 51% report applications in marketing and sales, 39% in operations and logistics and 25% in customer service. Marketing and sales use cases, including customer segmentation, targeted advertising and personalised content, are most common in customer-facing industries. Accommodation, cafes, and restaurants report AI use in marketing and sales at 89%, while wholesale (70%), retail (68%), property services (61%), manufacturing (56%), and construction (54%) also show high usage in that area.
Finance and insurance SMEs are more likely to direct AI towards operational, risk, and compliance activities than front-line marketing. According to the report, industries with complex, process-heavy workflows – such as finance and insurance, business services, and health – are among those most likely to view automation as the central AI application, particularly for productivity, administration, and regulatory support. Across the SME sample, 35% of respondents identify automation as the area where AI could assist most, followed by marketing and sales optimisation at 31% and improved decision-making at 23%. Customer experience (22%) and cost reduction and efficiency (18%) are also cited, with the mix of priorities shifting from one industry to another.
Steel said Australian SMEs appear willing to trial AI where it is seen as manageable and relevant, but many still seek assistance to address uncertainty and risk. “Australians have long demonstrated themselves as early adopters of technology, and this research shows that mindset in action, they’re embracing AI, not scared of it. The opportunity now is to help many more companies through something that feels complex and uncertain – to adopt this technology safely and with confidence,” he said. Higher AI use within finance and insurance itself, alongside rising adoption among SMEs in other sectors, points to a growing set of considerations. These include underwriting AI-enabled processes and data flows, revising product and coverage design, and supporting clients on governance, resilience, and regulatory obligations as AI becomes a standard part of SME operations.
