Accenture analysed more than 20,000 banking and payments institutions across seven markets to quantify the level of change and disruption in the global banking industry. The study found that the number of banking and payments institutions decreased by nearly 20% over a 12-year period - from 24,000 in 2005 to less than 19,300 in 2017. However, nearly one in six of current participants are what Accenture considers new entrants, arriving in the market after 2005.

The UK is viewed as a forerunner in the digital disruption stakes thanks to a spate of regulatory initiatives to open up the market. Here 63% of banking and payment institutions are classified by Accenture as new entrants, capturing 14% of total banking revenues at £24bn, with the majority going to non-bank payments institutions.

The report suggests incumbent banks will likely start to see a significant impact on revenues as leading challenger banks surpass the 1 million customer threshold in a market where 15 fintechs have been granted full banking licenses.

“Ten years after the financial crisis, the banking industry is experiencing a level of competitive intensity and disruption that’s much greater than what’s been seen before,” says Julian Skan, senior managing director for Banking and Capital Markets, Accenture Strategy. “With challenger banks and platform players reducing traditional banks’ competitiveness and the threat of a power shift looming, incumbent players can no longer rest on their laurels.”

In Europe (including the UK), 20% of the banking and payments institutions are new entrants and have captured nearly seven percent of total banking revenue — and one-third of all new revenue since 2005 at €54B. In the US, 19% of financial institutions are new entrants and they have amassed 3.5 percent of total banking and payments revenues.

While many incumbent banks continue to dismiss the threat from digital disruption, Accenture predicts that the shift in revenue to new entrants will continue and will start to have a material impact on incumbent banks’ profits.

“As the banking industry experiences radical change, driven by regulation, new entrants and demanding consumers, banks will need to reassess their assets, strengths and capabilities to determine if they are taking their business in the right direction,” Alan McIntyre, head of Accenture's global banking practice. “The future belongs to banks that can build new sources of growth, including finding opportunities beyond traditional financial services. They can’t afford to blindly follow the path they originally set out at the beginning of their digital journey."