Opening Address by SMS Tan Kiat How at UOB FinLab AI Ready Changemakers Summit

A very good morning. Let me start by acknowledging Managing Director & Group Head, UOB, Janet Young, partners who are supporting this event – IMDA, AI Singapore, Microsoft, Ngee Ann Polytechnic, and all of you for being here this morning, part of the changemakers ecosystem and riding the next wave of AI.

Many of you have spent the past few years digitalising your businesses. You may already be using accounting software, HR systems, CRM tools or other digital solutions. So perhaps the question you are asking now is: “What comes next?”

AI is the next major shift. It is not often in the technology space you see such a big shift in terms of the capability of the technology itself. AI is not something new per se. We have been talking about artificial intelligence for many decades, but over the last few years, we have seen  a tremendous shift. It is a step change in the capabilities  of these technologies. You see things coming to the fore, especially in recent months – agentic software, AI agents, autonomous systems, and the speed of change of this technology is only picking up pace.

When  technology is one of the important themes of a conversation between the two largest economies in the world, when the two leaders of these countries meet, you know it is not just a technology issue., I-t is a more fundamental issue –  an economic issue, a geopolitical issue, and a strategic issue. You see it being discussed at the UN General Assembly, and you know that these are important topics on everyone's minds.

So what does this mean for all of us, companies, enterprises, and our workers that we care for?

I think this is a tremendous opportunity for all of you. All of you know that you cannot adopt technology because it is new. It's newfangled, it looks shiny. You become FOMO, you feel like you are missing out. For business owners who do that, you realise that after a while, you do not reap the benefits of using that technology.

You might have the technology, but can you really fully derive the benefits, the returns on investment, and the value for your company? It is not so clear, not quite certain. Before you jump into it, and start buying and using a technology, I think it is worth thinking about what you are  going to use it for and how you are  going to get value from all of this.

We should start with our first question: “Will it solve a real problem?”, “Will it make my business better?”, and “Will my people be able to use it well?”

That is what I want to talk about. The first set of questions that we should focus amongst all before we start thinking about purchasing, and using the technology, is starting with something that you know the best – your business.

Why is this important for Singapore? Singapore has the ambition to be a global AI hub with  a vibrant AI ecosystem. We are not just developing AI here, but also adopting and using AI for economic and societal value. So this is important for Singapore, especially for a small open economy that is constrained by resources – land, power, energy, and market size. But AI and many other technologies allow us to overcome many of these constraints.

But our ambition to be a vibrant AI ecosystem is not only about our largest technology companies or our most advanced research here in Singapore. It is also about the thousands of SMEs that make up our economy.

SMEs account for 99% of our enterprises in Singapore and represent about seven in ten workers. So when SMEs transform, leveraging AI technology, our workers will transform alongside with you, and our economy will also transform in tandem.

Many of you are balancing very practical challenges every day — managing costs, finding manpower and trying to grow.

So my first message is simple: Don’t start with AI. Start with the problem. Where are your people spending too much time? Where are there repetitive tasks? Where are customers waiting too long? Where could better information help you make a better decision? That could be marketing, customer service, data analysis, or something very specific to your own industry.

You do not need to transform the entire company on day one. Find one problem that matters. Try something, see whether it works, and measure the result.

We are already seeing encouraging results. SMEs adopting AI-enabled solutions supported through the Productivity Solutions Grant recorded average cost savings of 52 per cent in 2024. That's quite encouraging.

The opportunity is not simply to experiment with AI. The real opportunity is to turn a useful experiment into a better way of doing business.

That's my first point – know how the technology helps you solve part of the problem or resolve some of the challenges and get value out of it hat.

My second message is about the people that you bring along with you – your staff, your employees, your colleagues, and your coworkers.

Technology adoption and workforce transformation must happen together. When AI can automate tasks and processes, it is natural for people to worry about what this means for their jobs.

But rather than asking, “What can AI replace”, we should ask, “What can our people do better with AI, and “What will become more valuable?”

AI does not make expertise less important. In fact, in many cases, it makes expertise more important. Your employees know your customers. They understand your processes. They know where things usually go wrong. They understand the context that may not be obvious from a prompt or a dataset.

AI can produce an answer. Your people know whether that answer makes sense.

That is why I encourage business owners to involve their employees from the start. Ask them: “What takes up your time?”, “What frustrates you?”, “What could be done differently?”, and “What should not be automated?”

I think this is going to be very important in the future. I look at it not just as a policymaker, but also as someone who's now very actively involved in trying to integrate technology like AI into healthcare, at MOH, which is the other ministry that I'm with. There are many healthcare providers in the health system – from doctors and clinicians to nurses and many frontline offices and staff. They know the problems, they know the issues, and more importantly, the relationship between a patient and a health system is not through a technology, not through a screen, it is through a person.

It is the same thing for your business. Many times, your customers, especially those who have been with you for many years – that relationship is built not just through a click, a prompt and a screen. It is with you, your business, and the front and face of your business – your staff.

I encourage all of us to think about AI technology in a very different way. If you have that mindset that artificial intelligence will be much more extensively used, that begs the next question: “Where are the bottlenecks of the future?” Why is that important? Because bottlenecks are where economic value accrues.

If you look at the software bottlenecks for yourself, for your customers, or for a certain industry segment where people are willing to pay money for, that is where commercialisation and monetisation efforts bear fruit. So what becomes more valuable if it's not artificial intelligence?

It must be quite clear that in Singapore, we are not in the intelligence race. We are not going to develop the best frontier models. We are not going to develop every advanced chip in the world. We are in the adoption phase. But there are so many opportunities in adoption. Think about every sector in the world – from financial services to banking to hospitality, manufacturing, and many of the sectors that you are in. These industry sectors, value chains, and supply chain ecosystem have been developed and built on an earlier assumption of how the world works and how technology is deployed.

For those who are at the forefront of adopting AI sensibly, you will be among the first to reap the benefits. But to reap the benefits, it is not about having better artificial intelligence deployed in your organisation or in your sector. It is about understanding where the bottlenecks are and how to solve those problems. And to understand those bottlenecks, whether for a certain industry segment or your company, requires people who understand the business, understand the domain, understand your customers, understand your pain points and industry pain points. And these are your staff with many decades, many years of experience.

So as artificial intelligence gets more accessible and pervasive, the context, expertise, judgment, knowledge, and sometimes instinct become much more valuable. I always encourage companies – when you think about technology and adopting it don't think about just cutting costs and reducing manpower: “I can save two manpower here, I can save one person there.” Think about it this way – you are actually hobbling your future growth by cutting people and reducing the reliance on context. Use AI to make your people more capable, able to understand your customers better, able to respond faster, able to seize opportunities faster. And that I would say is the most important opportunity lying ahead for Singapore and all of you.

Think of it as a trampoline. The first few bounds always give you the momentum to jump higher. Think of it that as your early foundation of digitalisation. We have spent years putting in place the right digital foundation from data to processes, to workflow optimisation, to training your people and staff. Those are the first few bounces. The next bounce to jump really high is using AI to power your next jump to reach greater heights. To reach greater heights in your business, in your industry, to seize new opportunities, what you need is not just technology or AI but the people that power your organisation.

Think about AI use as not just reducing cost, letting go of people by saving one or two headcounts here and there. Those are short-term gains. The longer-term gain facing all of you now is really how to use this opportunity where AI is still its nascent stage. Notwithstanding its rapid development over the last few years, we are still at a very nascent stage. To transform, disrupt, create new industries and new opportunity requires you to jump higher, reach new heights, and bring your people along.

So that is my second message – bring your people along. They are the ones who are going to help you reach the greater heights in the next phase of AI-powered digitalisation.

Let me turn to another important point. As you jump higher, the risk of falling or flying out of the trampoline safety area is much higher too. How do you make sure that you land safely so that the next bounce gives you greater momentum to reach greater heights.

As you use AI to rethink how your work is done and as you scale, you also have to do so responsibly because AI can make mistakes, and mistakes can scale exponentially and compound. So businesses also need appropriate safeguards around cybersecurity, data protection, validation and, most importantly, human accountability.

Let me give a healthcare example. AI may help to provide a better or much faster clinical diagnosis, but ultimately, the doctor needs to sign off on the diagnosis. The human accountability is important.

Likewise, AI can make your processes much faster, do a three-way matching of your purchase order (PO), sales order (SO), and delivery order (DO) much faster. Ultimately, your clients expect you to be responsible – the company and the people behind it. So these guardrails and governance measures around cybersecurity, data protection and so on are going to be much more important in the age of AI because the speed at which transactions and processes are done will be exponentially faster. In the coming years, it will be done autonomously, as you trust your agent to do the task, and transact on your behalf automatically. It is all the more important for us to have the right guardrails and protections.

But you do not have to figure all this out by yourself. It can be daunting – many technical jargons, many terms, and many things to think about.

The government has a role to play, our private sector partners have a role to play, and you have a role to play. We want to make it easier for businesses to identify useful opportunities, test solutions and build the capabilities to implement them.

Please check out the different programmes like SMEs Go Digital and Digital Leaders Programme from IMDA, the UOB-IMDA AI Ready Programme, and many more. These are all resources put together by the different stakeholders in the ecosystem to support your AI and digitalisation journey in the coming years. For example, the AI Ready Programme has already helped 500 SMEs identify practical AI use cases, assess their readiness and begin their AI transformation journeys.

One example is Events Partner. They did not start by asking: “How do we become an AI company?” They started with a much simpler business problem: “How do we generate better leads?” They used AI to improve how they identified and approached prospects. The result was a doubling of monthly targeted outreach, while improving the effectiveness of their sales prospecting process.

That is what practical AI adoption can look like. Start with one pain point. Test it, learn from it, then build from there.

I am glad that UOB is taking this further with its enhanced AI Ready programme which will help more firms move from exploration towards implementation.

As the saying goes, a thousand-mile journey starts with the first step. In Chinese, they say “万事起头难”. The first step is always the hardest. Usually, the second step and then the third step are easier. But you have many people supporting and guiding you, even on the first step.

As you go through today's summit, I would encourage you to think about three questions.

1. First: What is one business problem that matters to you?

2. Second: What could AI help you do better?

3. Third: Importantly, what will your people need to learn or change to make that possible?

You do not need to have all the answers today. AI itself will continue to change, evolve and advance. What matters is building the habit of learning, experimenting and adapting.

Because the businesses that benefit most from AI will not necessarily be the ones that adopt the most technology. They will be the ones that learn how to use it well and are able to adapt much faster to the changing technological landscape.

You do not need to become an AI company. You need to become a better company with AI.

I hope you will leave today's summit with one practical idea that you can take back to your business, try with your people, and put to work.

Looking forward to seeing the exciting innovations all of you will create and the impact you will make in Singapore and beyond.

Thank you very much.