The global banking industry is failing to respond to a growing digital threat, that could also be harnessed to ramp up profits, according to McKinsey's annual banking review.
And it's not coming from the expected suspects of budding fintech firms, but the likes of Jeff Bezos' ecommerce giant Amazon.
By tapping into the potential of new technology and robotic process automation, the cloud and apps, and developing "platform capabilities", banks could secure an extra $350bn (£264bn) of profit over the next three to five years, the report said.
The productivity boost from digitising their businesses would help banks to combat the anticipated threat from the likes of Amazon, which already has a small business lending arm, and other "platform companies" like Alibaba and Tencent. Those are set to prove the chief digital threat to banks, rather than the rise of fintechs.
McKinsey said that, "while we noted the presence of the platform companies lurking in the shadows in 2015, we thought that fintechs would provide the chief digital threat".
Instead, banks have been able to parry many of the fintechs' moves and have joined forces with them in several cases - while the platform companies are emerging as a formidable force.
As well as "staking a claim to banks' customers", McKinsey said these tech heavyweights were also moving in on banks' revenues and profits.
And despite signs of improved health in terms of capitalisation, liquidity and costs, the global banking industry's performance "continues to be lacklustre".
As of August 2017, bank shares had dipped and were 10 per cent below their June 2015 peak, while major stock markets rallied.
Should the accelerating digital threat from new competitors and customers' widespread adoption of digital banking continue "unchecked", it could lower the industry's return on equity to 5.2 per cent by 2025, the report warned.
In order to get a handle on the digital threat, McKinsey said banks need to initially deploy the digital tools available to them to industrialise their operations to boost revenue, improve capital usage, and in particular, cut costs.
Banks still have the opportunity to take the reins, as they are trusted by customers and hold huge amounts of data, according to the consulting firm.
The report said:
Our previous research identified two major effects from new digital entrants: the loss of the customer relationship and margin erosion across retail segments.
We see new evidence of those trends - and they are happening faster than we expected. Margins continue to fall worldwide.
Banks need to develop platform capabilities in their push for sustained success, and consider partnering with platform firms, the report said.
The report compiled insight from McKinsey's database covering banking markets in more than 90 countries, along with its fintech database.