A large number of banks will disappear over the next few years as a result of "digital disruption", the head of a top European bank warned during a CNBC panel at the World Economic Forum in Davos on Friday.
Francisco González, the chairman and chief executive of Spain's BBVA, said that a large number of technology start-ups are "attacking" different parts of banks' businesses and not every lender is equipped to survive.
"The banking system has to take this situation very serious because, apart from this present situation, low interest rates and inflation, there is a big threat for the banking system...which is the digital disruption, this is a big issue," González said on a panel discussion with CNBC.
"The problem is, there are 20,000 banks in the world, that is impossible, a big number of banks will disappear over the next five, ten years," he added.
Last year, BBVA poured £45 million into a digital-only bank in the U.K. called Atom as it looks to invest in new technology, a move that it hopes will help it survive in the digital age.
Discussing banking's "Uber moment" – a phrase used by former Barclays CEO Anthony Jenkins to describe technological advances that could see bank branches close down and people laid off – UBS chairman Axel Weber said the banking industry would fare better than taxis.
"We're facing an Uber moment, but I think other than the taxi industry, the banks will react differently," Weber said.
"Our clients now…want 24-hour services, 7 days a week, multichannel all the time. If we give them that they will remain our clients."
Companies such as Transferwise and World Remit are attempting to beat the banks on price in areas such as international money transfers and remittances. A number of digital-only banks are also popping up in a bid to challenge incumbents.
But while there is a threat to banks' businesses, there is also a big opportunity, according to one of the panellists on the CNBC debate.
"I see it as being a really exciting positive thing and I think it links to the point about transparency and how financial institutions whose reputations have suffered in recent years can reconnect with customers and provide services that people need, rebuild trust at lower cost, bigger markets," the European commissioner for financial stability, financial services and capital markets union said.
Still, new technology will require up-to-date regulation. Companies like Uber, for example, have run into huge issues in Europe after failing to meet up to some regulation in certain countries. European Central Bank board member Benoit Coeure, said legislation will need to be made carefully for banking technology.
"One challenge for us will be to identify the right regulatory space for this to…blossom. We don't want to stifle innovation. We don't want to move back to light touch regulation which hasn't left good memories, so we will have to find the right regulation that will allow it to develop," Coeure said.