AI adoption among Australian small and medium enterprises (SMEs) shows marked variation across sectors, with property services, finance, and insurance leading the way, according to findings from the National Australia Bank (NAB). Their report, “Embracing AI: Adoption & Key Opportunities Identified by SMEs,” reveals that 42% of Australian SMEs currently utilize AI technology in their operations, while 14% are planning to integrate it. Conversely, 16% of respondents indicated that AI would not be of assistance to their businesses.
Based on survey responses from approximately 670 SMEs in the non-farm sector collected between November 10 and December 9, 2025, the research highlights that over 98% of all Australian businesses are categorized as SMEs. Alarmingly, 44% of SMEs reported not using AI, representing more than 40% of the nation’s total business landscape.
The variance in AI adoption rates is significant across different sectors. The property services sector shows the highest uptake at 69%, closely followed by finance and insurance at 65%, and business services at 61%. In stark contrast, the transport and storage sector exhibited the lowest adoption rate at just 21%. These top three sectors are characterized by high levels of digital maturity and a substantial volume of data, making them well positioned to leverage AI for critical tasks such as forecasting, compliance, risk management, and process automation.
The report highlights that within the finance and insurance sector, the automation of repetitive tasks is viewed as the largest opportunity for AI deployment, identified by 64% of respondents. Furthermore, 35% of those surveyed within this sector indicated that AI could significantly enhance decision-making processes, reflecting a growing confidence in its capabilities for improving forecasting, risk assessment, and operational planning.
On the other hand, sectors like manufacturing and retail demonstrated comparatively lower adoption rates at 35% and 22%, respectively. Notably, retail displayed the highest non-adoption rate, with 64% of respondents indicating they have not integrated AI into their operations. NAB attributes this hesitance to the industry’s tighter profit margins, reliance on legacy systems, and fragmented supply chains, which present additional challenges for AI integration.
Pete Steel, NAB’s group executive for digital, data, and AI, remarked, “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.” He emphasized that sectors with strong digital foundations or established analytical workflows are better positioned to integrate and benefit from AI technologies.
NAB’s findings suggest a broader trend where the operating model, data maturity, and commercial pressures faced by each sector are fundamentally shaping the pathways SMEs are taking in their AI adoption journeys. As the landscape evolves, the report concludes that a clearer understanding of AI’s role could facilitate more strategic decisions across various industries, encouraging a move toward greater efficiency and productivity.
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