AI is a powerful tool, but integration requires a broad rethinking, says Christopher Cai
Disclaimer: Unless otherwise stated, any opinions expressed below belong to the author.
AI adoption in Singapore has seen significant growth in recent years. According to the 2025 Singapore Digital Economy (SGDE) Report, AI adoption among SMEs tripled in 2024, rising from 4.2% to 14.5%. Larger companies are also on board, with 62.5% already integrating AI into their operations.
However, many startups are still struggling to leverage AI’s potential effectively.
In my experience with SMEs and startups, I often see them rush to implement AI without considering how the tech will integrate into existing processes.
AI needs quality data to learn from and improve
For example, one company I worked with recently adopted an AI-driven solution to assist with improving operational efficiency. However, the results fell short. The issue was not AI itself, but rather the lack of clean, relevant data to train it.
AI cannot function effectively without high-quality data to learn from, and this is a common challenge. Without proper preparation, businesses are likely to see disappointing outcomes.
To illustrate, in the EdTech space, automating processes like student progress reports often fails when the data—such as student performance metrics, attendance, and grades—are inconsistent or inaccurate. This results in unreliable outputs, generic reports, or missed insights that educators depend on for effective student support and decision-making.
To unlock AI’s full potential, startups must ensure their data is well-structured and workflows are optimised before introducing AI. Only then can they expect AI to deliver the value it promises.
Moreover, as AI systems require access to sensitive data, they also introduce new risks. When businesses overlook data readiness, security concerns become more prominent. Startups deploying AI must ensure proper security protocols are in place. In Singapore, with strong regulations like the Personal Data Protection Act, businesses must manage AI’s access to sensitive data responsibly to avoid legal and privacy issues.
For instance, in the fintech industry, a business adopted an AI solution to assist with reporting and forecasting, but failed to secure its financial data adequately. This led to privacy concerns and delays. AI should only be granted the access they need—nothing more, nothing less.
Companies should treat AI as they would a new employee: would you grant them unrestricted access to all company systems? Proper access control, encryption, and compliance with privacy laws are critical to the successful and secure adoption of AI.
Effective AI integration is more than just cost savings
AI is often adopted with the misconception that it is only about automating tasks and cutting costs. While AI does help drive efficiencies, its true potential goes far beyond short-term savings.
Rather than viewing AI purely as a cost-reduction tool, businesses should focus on how it can transform operations and unlock new growth opportunities.
In the fintech sector, AI was initially introduced to manage all customer service enquiries. However, after reviewing the workflow, we discovered that AI was better suited for handling routine queries, allowing human agents to focus on more complex cases. This shift enabled the team to work on higher-value tasks, improving both service quality and productivity.
In sectors such as finance and customer service, AI can enhance human decision-making. Traditionally, many leaders spent a substantial amount of their time on repetitive, data-heavy tasks like analyzing reports or reviewing operational processes. AI provides insights that free up a person’s mindshare, allowing them to move away from these tasks and instead focus on higher-level strategies and decisions that drive business growth.
AI must be treated as a long-term investment, integrated gradually into workflows to generate sustainable value. Many businesses fail to see AI’s true potential because they expect immediate results. Startups should focus on phased adoption: start small, scale based on feedback, and adjust implementation over time. This ensures that AI is optimised for the business and aligned with strategic goals.
With AI evolving rapidly, new tools and technologies emerge frequently, creating both opportunities and challenges. Businesses need to assess each innovation carefully to determine its fit for their specific context. Jumping on every trend without considering the long-term impact can lead to wasted resources.
Rather than viewing AI as a quick fix or just another trend to chase, startups should treat it as a strategic partner. Much like integrating a new team member, AI is an evolving resource that can contribute to the growth of the business over time.
AI still needs human expertise to show its true capabilities
Just as you wouldn’t expect a new hire to perform perfectly from day one, AI needs training, fine-tuning, and time to become fully integrated into your business strategy. Those that take a thoughtful, disciplined approach to adoption will be best positioned to unlock AI’s true potential, driving growth and innovation in the long run.
Beyond improving efficiency, AI is a tool to empower employees, enhance decision-making, and create a sustainable advantage in a competitive market. This means collaboration between AI systems and human expertise, aligning business processes with AI’s capabilities.
Startups that embrace this partnership and avoid treating AI as a mere cost-saving tool will find that it enables them to stay ahead of market trends, improve customer experiences, and drive meaningful business transformations.
About Christopher Cai
Christopher Cai is the co-head of AngelHack Dev Labs, where he architects AI-driven solutions and builds high-performing product & engineering teams. With over 15 years of experience in consulting, full-stack development, and product management, he excels at leveraging cutting-edge technology to streamline workflows and maximise efficiency.
Featured Image Credit: la pico de gallo/ Shutterstock.com
