Malaysia’s corporate sector is embracing digital tools at impressive rates. CPA Australia’s Business Technology Survey 2025 shows 87% of businesses use data analytics and 85% have adopted artificial intelligence (AI), figures nearly on par with global averages. These investments are already delivering benefits: improved efficiency, cost savings, better employee experiences and enhanced customer service.

Yet, beneath these headline numbers, several challenges remain. Cybersecurity maturity remains weak, AI integration is shallow, and systemic barriers continue to hold back Malaysia’s digital competitiveness.

Only 18% of Malaysian businesses have fully embedded cybersecurity into their operational strategy, well below the survey average of 28%. Of concern is that 17% react to cyber threats only as they occur, while 19% are unaware or unsure how their employer manages its cybersecurity.

This leaves organisations exposed at a time when AI-enabled scams, deepfake impersonations and targeted phishing attacks are becoming more sophisticated. Structured prevention and clear oversight must become core business priorities. Without stronger cyber security, Malaysian businesses risk undermining the trust essential for digital growth.

While AI adoption among Malaysian businesses is widespread, deep integration remains limited. Just 11% of businesses have embedded AI across their operations, compared with 16% globally. Most rely on off-the-shelf tools such as ChatGPT and Microsoft Copilot, or built-in assistants, using them occasionally for routine tasks like summarising documents or automating workflows.

These tools boost productivity and accuracy, but they are not transformative. To unlock AI’s full potential, businesses must move beyond task-based usage and invest in customised solutions, integration with core systems and workforce capability.

High implementation costs, low tech literacy among senior leaders and talent shortages remain as the main obstacles to adopting new technologies, the survey found.

This is a strategic, not a technical, issue. Board-level decisions on digital transformation directly affect competitiveness and growth, and without confident, tech-savvy leadership, investments risk underperforming.

Heavy reliance on off-the-shelf AI tools and limited staff training means businesses are not building the internal capabilities needed to become high-value digital organisations. Upskilling employees to complement technology is essential for Malaysia’s digital transformation.

AI is already reshaping workflows, increasing productivity and improving customer experiences. But it is no substitute for human skills. The challenge is to strike the right balance: leveraging AI’s efficiency gains while preserving human oversight, judgement and expertise.

In finance and accounting roles, for example, most firms report no change in hiring practices due to AI. Only a small minority have reduced junior recruitment, suggesting displacement fears are premature. More likely, junior accounting roles are evolving: they will require stronger analytical, technical and soft skills, alongside AI capabilities, while organisations must ensure accountability and final decision-making remain firmly with humans.

The government’s forthcoming AI Technology Action Plan 2026-2030 signals an ambition to make Malaysia an AI-driven economy. Businesses must deepen their capabilities to turn this policy momentum into a competitive advantage.

Three imperatives for Malaysian businesses stand out:

Malaysia’s strong AI adoption, momentum and ambition position it to become a regional digital leader. The challenge is converting this uptake into lasting competitiveness through better business oversight, stronger cybersecurity and a more capable workforce.

Priya Terumalay FCPA is CPA Australia’s regional head for Southeast Asia, and Azfar Asa’ad is its senior adviser in business and investment.