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Digital disruption is shaking up banking and real estate

Europe's business leaders may recognise the need to evolve to take on the disruptors like Uber and AirBnB, but they're still not moving quickly enough, experts are warning.

"Time and time again we have seen the mighty fall because they didn't pay attention until it was too late," Adam Graham, chair of digital industry association BIMA told CNBC via email.

"Established companies have the ability to change direction quickly. It takes guts and determination but it is essential to surviving in a fast changing market."

"If you don't change with the changes that are happening in the broader environment then you fail," Tarek Nseir, CEO of digital transformation agency TH_NK told CNBC in a phone interview.

Online banking is disrupting the traditional retail model of bank branches
Oliver Burston | Ikon Images | Getty Images
Online banking is disrupting the traditional retail model of bank branches

Retail banks, for instance, are failing to adjust to disruption by holding onto their expensive branch networks while more and more customers switch to digital banking, according to Nseir.

"It's going to be almost impossible to steer that ship in time to accommodate that disruption," he said. "I suspect that's the position most of these banks will find themselves in."

Some banks have responded by investing in digital disruptors. Spanish banking giant BBVA paid £45million ($64.77million) for a 30 percent stake in Atom Bank, a new bank in the U.K. which is only available through mobile and tablet apps. Customers can open an account by registering online.

"The digital consumer no longer needs the old-fashioned banking model and technology allows us to create a digital proposition that, in my view, betters a traditional retail banking proposition," he added.

John Lyons, PwC's head of retail banking, said that traditional banks are looking critically at the cost of maintaining their branch networks.

"Technology is eroding the case for branches year on year as more people get used to products and services being delivered digitally," he told CNBC via email.

According to Lyons, bank branches won't disappear anytime soon, but will reduce in number each year. In addition, technical solutions are replacing the need for face to face interactions.

"We are seeing rapid growth in the use of video conferencing," Lyons explained. "Artificial Intelligence is supporting more complex services being delivered online."

Nseir's advice for businesses was that leadership teams need to come to an understanding about how things are changing and modernize their core businesses accordingly.

"While people constantly try and measure the upside of transformation programs, what we often find with our customers is no one models the potential downside of not transforming at the pace required," he said.

The real estate business is also being disrupted. In recent years, several online estate agencies have been set up, allowing consumers to buy and sell properties digitally rather than visit a high street branch. Currently, online estate agents only have 4-5 percent of market share, but a recent YouGov survey of 1,300 U.K. residents found 32 percent would seriously consider using an online estate agent.

Nseir predicts that, within the next five years, the commercial estate agency business will be turned on its head by digital disruption. Already, websites in the U.K. such as Purple Bricks are providing an online estate agency service for residential property.

"If you are a landlord or you are buying or selling a property, why would you pay up to three or four times as much for a traditional estate agency when it's quite clear that the likes of Purple Bricks and other models are able to provide just as much reach to a potential audience of buyers but of far greater value," explained

Evgeny Terentev | E+ | Getty Images

One such disruptor is eMoov.

"The online sector has evolved at such a rapid rate. During its conception the main advantage was price, selling a house for a fraction of the charges imposed by a high street agent," Russell Quirk, founder and CEO of eMoov, told CNBC via email.

"The future of estate agency really is here and as it continues to grow the consumer is the one who will benefit as a result"

According to Nseir, companies within this sector are not prepared for the coming changes.

"It's not going to stop at residential; it will absolutely be commercial as well. There's no difference between a value seeking private landlord and a value seeking business that is looking for a new home," he said.

"That market is going to disrupt incredibly quickly," he added.

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