Banks must concentrate on harnessing a range of digital technologies or risk losing customers to a new wave of competitors, according to a new report by the British Banking Association and Accenture.

The study said digital innovation enables banks to offer better and more personalized services to clients as well as cutting costs. However, it warns that there is a risk that technology giants and innovative new start-ups will "cherry pick" key products and services from banks, according to a press release about the report.

Called "Digital Disruption," the report features interviews with leading experts from banks setting out their vision of the future and raises questions for regulators about when a non-banking firm should be overseen in a similar way to a bank.

It urges regulators to ensure that all organizations offering banking services are regulated in the same way to give consumers certainty that they are properly protected wherever they choose to bank, according to announcement. Policymakers must also be mindful of the threat posed to financial stability from providers of banking services not covered by existing regulation. The report argues that regulators have to take care not to hamper either innovation or competition.

Whereas the BBA's previous Way We Bank Now reports have focussed on the uptake of consumer-friendly banking technology, the new study focuses on what this innovation means for the banking industry.

The new report sets out six recommendations for the banking industry:

• Anticipation: Innovative entrants are developing lucrative products and services. In order to remain relevant, banks must look ahead to spot those parts of their business models more vulnerable to these entrants.
• Speed: The pace of change is greater now than ever before. In order to meet rising customer expectations, banks will need to significantly increase the speed of innovation.
• Branch evolution: Digitization is enabling faster and more convenient access, but that is not always integrated with the banks' services. The role of the branch needs to evolve towards offering seamless customer services.
• Harness data: Exploring customer appetite for banks to use the data available to them could open a new channel of communications between banks and their customers. This could also help customers save money and better manage their finances.
• Invest: In the digital age, customers expect transactions on their current accounts to be virtually instantaneous. So banks need to continue investing in their IT platforms to meet customer expectations and avoid IT outages.
• Culture: Change the internal culture to one which is more agile and innovative, less process-driven and yet still focused on minimizing risk.