Over 60% of FIs in Hong Kong and China underinvest in AI

Over 60% of financial institutions (FI) in Hong Kong and China are allocating 10% or less of their technology budget to AI, revealing a spending gap of 30–40% compared to the global standard, according to a PwC report.

The report, titled "Reimaging financial services with AI", 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.

“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,” said PwC China financial services industry leader Matthew Phillips. “They are more focused on how AI can enhance their market position and give them greater strategic options. But the question remains whether they are spending enough.” 

Phillips added, “Our respondents have high expectations regarding the impact of AI on their businesses. This is about more than efficiency gains. 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.”

The report identifies key AI use cases being adopted by financial institutions, ranging from enhanced customer service to fraud detection and predictive analytics. Across banking, insurance, and AWM, the vast majority of respondents view AI as a driver of strategic transformation rather than simply a tool for efficiency.

Survey respondents cite reduced risk, more effective compliance, increased revenues, and lower costs as contributors to the ROI of their AI initiatives. There is also a strong emphasis on human-AI collaboration: 57% of respondents use AI to augment employee roles, with AI complementing human capabilities more often than it is used to reduce headcount.

However, the report highlights several constraints on broader AI deployment. Talent shortages and organisational rigidity are cited as greater barriers than budget or technical limitations. Only 29% of FIs report having successfully established an “AI-first” culture. Technical capabilities alone are insufficient—legacy processes and functional silos must be addressed to enable the necessary cultural transformation.

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

“How AI is deployed varies somewhat between the different sectors,” said PwC Hong Kong asset and 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.”

“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.”

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