Financial institutions look to AI for strategic transformation, rather than efficiencies–PwC report

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57% use AI to augment employees’ roles, as they seek talent who understand ‘both the business and the algorithms’ 

Hong Kong, 17 March 2026—PwC today releases a new report examining how financial institutions (FIs) are using AI, the impact this is having on their business, and what obstacles need to be overcome to allow wider adoption. The report is based on a substantial survey of 201 financial services professionals, coupled with 20 in-depth interviews, conducted between October 2025 and January 2026. The respondents represent a cross-section of the banking, insurance, and asset & wealth management (AWM) sectors in the Chinese Mainland and Hong Kong.

The report identifies the main uses for AI being adopted by FIs. These range from enhanced customer service to fraud detection and predictive analysis. Across all three sectors (banking, insurance and AWM) the vast majority of respondents see AI as a driver of strategic transformation, rather than just efficiency gains.

“While our survey respondents are reporting a degree of return on their investments in AI, this is far from being their primary concern at this stage,” says PwC China Financial Services Industry Leader Matthew Phillips. “They are more focussed on how AI can enhance their market position and give them greater strategic options. But the question remains whether they are spending enough. 61% of FIs surveyed are allocating 10% or less of their technology budget to AI. This indicates a 30-40% spending gap compared to the global standard.” 

Survey respondents report reduced risk, more effective compliance, increased revenues and lower cost as all contributing to the ROI on their AI projects. There is also an emphasis on human-AI collaboration: 57% of respondents are using AI to augment their employees’ roles. AI is used to complement human capabilities more than it is to reduce headcount. 

“How AI is deployed varies somewhat between the different sectors,” says PwC Hong Kong Asset & Wealth Management Industry Leader Josephine Kwan. “Anti-money laundering and compliance tasks figure strongly in banking. In insurance customer service is critical. In AWM, AI is being used directly in investment and portfolio management, as well as risk management and data analytics.”

However, the report identifies a number of constraints on the wider deployment of AI. Talent shortages and organisational rigidity are cited by our respondents as greater barriers to AI deployment than budgetary or technical issues. Only 29% of FIs say that they have already succeeded in establishing an “AI-first” culture. Technical capabilities are not enough–legacy processes and functional silos need to be overcome to achieve the necessary cultural transformation.

“Our respondents report challenges in finding professionals who understand both ‘the business and the algorithms’,” says PwC China AI Consulting Leader James Lee. “Training and upskilling of existing staff is critical to establishing an AI-first culture, along with incentives to encourage the use of AI as a transformational tool. But it is also extremely important that senior management leads by example and actively champions AI.”

Along with talent and organisational culture, data is a key constraint. The top three barriers to greater investment in AI cited by our respondents are data availability (30%), regulatory concerns (20%) and the need to prioritise existing core systems (14%). Data security and privacy protection issues are cited as the top data management challenges, resulting in 90% of FIs relying on internal, proprietary data for their AI use cases.

“Our respondents have high expectations regarding the impact of AI on their businesses. This is about more than efficiency gains,” says Matthew Phillips. “FIs see AI as an unmissable opportunity to transform their operating models and service offerings. But long-term investment will be required to overcome the challenges to wider AI deployment.”
 

Notes to editors:
Download the report: Reimagining Financial Services with AI-A survey of the FS industry in the Chinese Mainland and Hong Kong SAR