Gartner predicts that by the end of 2019, 25% of retail banks will use startup providers to replace legacy online and mobile banking systems as they respond to pressure to increase efficiencies and reduce costs while delivering next-generation digital services.

Incumbent vendors often do not support open architectures that decouple the presentation of services from the services and transactions themselves, says Gartner, creating an opportunity for new vendors to fill the gaps by offering apps and applications that support personalised, customer-centric banking experiences, data and behavioural analysis, location and context sensitivity across all devices and channels.

"This is why many banks developing digital banking strategies to meet customer demands have sought out new providers to replace their existing online and mobile banking solutions with digital banking platforms," says Stessa Cohen, research director at Gartner.

Digital banking platforms may include a broad range of capabilities, says Cohen, including financial management, payments, marketing, loyalty, analytics and customer communication management.

Gartner says bank CIOs should be prepared for extensive, potentially disruptive changes in this market, including merger-and-acquisition activity, heightened competition and new entrants from other geographic regions.

"Startups and emerging providers of digital banking platforms offer banks interesting opportunities for innovation," says Cohen. "However, CIOs must prepare to manage the challenges of evaluating and selecting new vendors that may not have proven track records in the financial services vertical or may simply be new and untried without an extensive customer base.