Financial institutions chase AI edge despite thin budgets

Almost 2 in 3 FIs allocate 10% or less of their tech budgets on AI.

Financial institutions (FIs) are currently more concerned about how artificial intelligence (AI) can enhance their market position instead of whether they are getting their money’s worth.

About 61% of FIs surveyed—201 financial services professionals and 20 in-depth interviews between October 2025 and January 2026—are allocating 10% or less of their technology budget to AI.

This indicates a 30% to 40% spending gap compared to the global standard, sad Matthew Phillips, PwC China financial services industry leader.

Survey respondents report reduced risk, more effective compliance, increased revenues and lower cost as all contributing to the ROI on their AI projects.

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.

“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,” said Josephine Kwan, PwC Hong Kong asset & wealth management industry leader.

Talent shortages and organisation rigidity were named as greater barriers to AI deployment than budgetary or technical issues, PwC found.

Only 29% of FIs say that they have already succeeded in establishing an “AI-first” culture, the survey found.