McKinsey warns that as much as 60% of bank profits in five retail businesses - consumer finance, mortgages, small-business lending, retail payments and wealth management - are at risk from a combination of shrinking margins and competition from fintech startups.

Banks worldwide face a choice between taking on new entrants through smarter use of their vast data resources and transforming their brands, or by forging alliances with startups, says the consultancy.

"The window for making this choice is narrowing," states the report. "Banks must decide soon, probably within three years, or the choice will be made for them."

Many banks have already begun the transition, shrinking their branch networks and spending heavily on mobile and online technologies in response to changing customer behaviour and the arrival of competition from big tech firms like Google and Apple. The creation of fintech accelerators by some of the world's biggest banks and the establishment of a multitude of venture funds to invest in fintech startups are another sign of the pressures facing the industry.

Those who fail to react quickly may find themselves ceding the customer relationship to tech firms and scaling back their operations to focus on basic products like current accounts and loans, effectively becoming "the banking equivalent of server farms" says McKinsey.

In February last year BBVA chairman and CEO Francisco Gonzalez warned that up to half of the world's banks will disappear through the cracks opened up by digital disruption of the industry. Forecasting that in the future, BBVA will become a software company, he said that competition from fintech startups and the entry into banking by any one of a number of big tech computer companies would have drastic consequences for banks which had failed to adjust to the digital revolution sweeping the industry.