The bank's 112-page report, titled 'Digital Disruption', predicts that US and European banks will shed 1.7 million jobs by 2025 as the banking sector undergoes its own "Uber moment".

While banks themselves will not be replaced, their branches will as new technology enables them to do more online or via mobile. In addition, banks are under pressure to automate more back-office processes which will also result in job cuts.

The report, written by the Citi's Global Perspectives and Solutions (GPS) division, warns against overplaying the threat of banks' disintermediation at the hands of non-bank competitors, as was famously predicted by Bill Gates in the 1990s, but it also highlights the increasing investment that fintech startups are attracting.

Lending and payments are two areas where fintech firms have attracted significant capital investment. Almost half (46%) of private funding for fintech startups was for lending services, while payment platforms accounted for 23%.

Both areas have traditionally been lucrative for banks with lending currently accounting for 56% of the profits generated by the banks that Citi analysed. But while new peer-peer lending companies have brought in a lot of venture capital, they still only account for 1% of global loans. Similarly new business models have displaced just 2-3% of consumer banking revenues in the US and even less in corporate banking.

However the report notes that the trends vary between regions, not least in Asia. In China, says Citi, the transition from physical to digital financial flows has been "breathtaking" with 96% of e-commerce sales done without a bank's involvement.

"Incumbent financial institutions still have the upper hand in terms of scale and we have not yet reached the tipping point of digital disruption in either the US or Europe," wrote Citi GPS managing editor Kathleen Boyle. "Given the growth in fintech investment, this isn't likely to continue for long."