The analysis of the business models of nearly 100 leading traditional banks and over 200 digital-only players in 11 countries across North America, Europe, Asia-Pacific, and Latin America finds scope for an additional US$518 billion in incumbent revenues by 2025.

Accenture identifies two common business models: vertically integrated, traditional business models; and non-linear adaptive models where the bank is a "packager".

The report says that while many traditional banks adopt the former model, they could achieve breakout growth if they unbundle their traditional products and partner with third parties to create and distribute new personalised customer offerings.

Specifically, by layering non-linear business models on top of the traditional vertically integrated model, they could boost their annual growth rates by up to an additional 3.8%.

The report notes that between 2018 and 2020, digital-only players performed significantly better than traditional banks. But those that adopted non-linear business models achieved 76% compound annual growth rate (CAGR) in revenue, while those digital players simply emulating traditional, vertically integrated models achieved only 44% CAGR.

Accenture recommends embracing one or a mix of four models: selling the banks own products; building a distribution-driven ecosystem; selling banking capability as a service; or creating new propositions through bundling.

Dilnisin Bayel, an MD in Accenture’s strategy and consulting group, UK, says: "Being digital is no longer a differentiator. To capture growth, traditional banks need to go beyond becoming the best digital versions of themselves and become adept at operating multiple business models simultaneously.

"This will require that they shift their perspective to consider adaptive models that put product innovation, embedded distribution, purpose, and sustainability at the forefront."