According to a research report from Morgan Stanley, banks in China have implemented artificial intelligence on a large scale across front, middle, and back-office roles. They are developing enterprise AI platforms, internal knowledge bases, digital assistants, and workflow tools, indicating that AI has moved into a phase of scaled implementation and is now a fundamental part of core banking infrastructure. The report states that AI is helping banks improve efficiency, reduce manual workloads, and enhance risk monitoring. This enables Chinese banks to expand services to more corporate and retail clients without increasing headcount, thereby alleviating pressures from the recent low-interest-rate environment. Additionally, AI assists banks in accurately matching financing needs within the real economy, ultimately boosting the overall competitiveness of Chinese companies while maintaining stable return on equity (ROE). The report highlighted that last year, the four major state-owned banks made substantial AI-related investments, with each spending over RMB 25 billion on IT, accounting for approximately 3% to 4% of total revenue. However, Morgan Stanley believes that banks capable of converting AI investment into widespread internal application and workflow transformation will stand out. Currently, Industrial and Commercial Bank of China (01398), China Construction Bank (00939), and China Merchants Bank (03968) are industry leaders, combining strong technological capabilities with effective execution.