Financial services boards are advancing AI expertise and governance rigor to stay ahead of change
In 2025, financial services (FS) companies faced persistent headwinds, including economic uncertainty, a shifting regulatory landscape, and rapid technological change. And the challenges will persist:
- Banks will continue to grapple with margin pressures and evolving capital requirements.
- Insurers face ever-growing climate-related risks and rising claims severity.
- Asset and wealth managers must adapt to fee compression and investor demand for personalization.
- Private equity is navigating slower exits, higher rates, and increased pressure to deliver operational value.
Across the industry, the rise of generative AI (GenAI) is both an opportunity and a challenge, offering efficiency gains but raising oversight and fiduciary risks. As top managers look to transform everything from customer service to business models, board leadership and oversight must be more forward-looking than ever.
Key insights from FS board members in PwC’s 2025 Annual Corporate Directors Survey
Directors in our 2025 Annual Corporate Directors Survey are more concerned than ever about their board colleagues underperforming, as external pressures mount and governance demands intensify. Most directors, though, are taking no action to alter familiar boardroom rhythms.
But every story has nuance, and different industries and sectors face distinct governance challenges. In 2025, 118 directors serving on boards of FS public companies participated in our survey, accounting for 18% of all respondents. The data shows FS boards actively positioning governance as a source of competitive advantage to respond to some of these external pressures. Here’s what we learned:
A shift toward redefining board expertise
Financial services has long pioneered technology adoption across operations. But 2025 marked a dramatic shift in the skillsets that FS boards are looking to add. Financial expertise is way down. AI expertise: way up. This is notable because the pace of change is happening faster in FS than in other industries.
A recent PwC Strategy& analysis suggests that banks that embrace AI could drive up to a 15 percentage-point improvement in their efficiency ratio. With FS corporate strategies and business models shifting to incorporate smart technologies, it’s no surprise that boards are aiming to bring AI expertise into the boardroom. This represents a real shift: Given directors’ broad oversight responsibilities, boards have rarely prioritized specialized skills for boardroom seats. But as AI continues to transform the entire industry, we could be witnessing the start of an evolving FS director profile—one built for disruption and digital transformation.
Directors wanting refreshment reaches new high, but FS boards may have an advantage
We began asking directors more than a decade ago whether they would like to replace any of their board colleagues, and the majority have always said no. Last year saw a tipping point: 55% of surveyed directors now think someone on their board should be replaced—and for a multitude of reasons.
FS directors feel slightly more positive about their colleagues, with 48%—the same as in our 2024 survey—saying that someone on their board should be replaced. While 48% doesn’t exactly represent a vote of confidence, it’s the lowest among all industries. This may reflect that FS boards are already evolving from within, integrating new expertise, and embracing a culture of ongoing improvement.
Directors generally see board assessments as only performative
Most directors say their board assessments give an incomplete picture of performance. That’s unsurprising, considering only about one-quarter report that their boards assess individual directors. It’s difficult to get a real understanding of any malfunctioning system—whether a hitching car, a feverish human body, or a board that members know is underperforming—without looking at the component parts. Boards must be proactive in keeping themselves fit for purpose and working to uncover problems before they occur, and that includes individual assessments.
What’s more, boards that use an external facilitator to conduct these assessments report greater satisfaction. Among FS directors who say their boards do not use a facilitator, only two-thirds say their process is effective; when a facilitator is involved, that jumps to 85%. Rotational use of an external facilitator every few years can surface hidden insights, deliver necessary tough feedback, and help boards take meaningful action.
As shareholder activism rises, boards need to stay prepared
Even as FS boards lead in many areas, they must be vigilant in adapting to evolving risks and expectations. For the 2025 survey, we asked directors whether their boards had prepared for different crisis scenarios using tabletop exercises. Across industries, most directors reported conducting exercises for cybersecurity incidents; many had also prepared for potential activist investors. FS directors, however, were significantly less likely than others to say their boards had prepared for potential activism—about half as often as directors in other industries.
While shareholder activism in 2025 was more prominent across the technology, healthcare, and industrials sectors, financial institutions accounted for 12% of all US activist campaigns, up from 3% in 2024. This could signal a need for FS boards to prepare for activism more rigorously moving forward.
Conclusion
Bottom line: FS boards are raising the bar. They’re not just reacting to change—they’re looking ahead. In an uncertain, fast-moving environment, governance is becoming a strategic edge, and boards that stay agile and accountable will be best positioned for success. How does your board stack up?
