Its definitely an interesting time to be a retail bank in the UK. 2014 was a rollercoaster ride, complete with regulatory changes, disruptive IT outages and innovative competitors encroaching on the turf of traditional retail banks.
2015 is shaping up to be even more challenging. A new wave of challenger banks are emerging - from Atom Bank to Fidor Bank. Opinion is divided amongst banking experts on the impact the challenger banks will have, but they are likely to place another pressure on banks bottom line.
The challenger banks also have scope to expand into loans, current accounts, savings accounts and mortgages in the future - and are not held back by legacy infrastructure or outdated technology.
Also nipping at the heels of the big six deposit institutions (HSBC, Barclays, RBS, Lloyds, HBOS and Nationwide) are technology companies and FinTech innovators.
Technology companies and innovative FinTech startups dont have to worry about the legacy technology underpinning incumbent banks, so are more free to try new things without risk to to the business.
Retail banks have been alerted. Francisco Gonzalez, the chairman of Spains second largest lender BBVA recently argued that banks must go digital to compete or die.
According to Gonzalez, only internet giants jumping into banking will make many banks realise the scale of disruption that has happened beneath them. By then, it may well be too late - as we point out in our Amazon bank blog.
Gonzalezs viewpoint is backed up by research last year by consultancy PwC. The consultancy found that more than half of CEOs at banks and capital-market firms see tech companies and financial services companies as an existential threat - almost double the portion last year.
Here are six companies looking to disrupt retail banking in the UK:
The idea of a Google Bank and what it would look like is already widely discussed within the industry. There are good reasons why this is the wrong question to ask - but Googles activities in wallets and mobile payments give CIOs good reason to be worried.
Google has been steadily removing the roadblocks to delivering a truly integrated mobile wallet - it recently signed a deal with AT&T Mobility, T-Mobile USA, Verizon Wireless and Softcard to have Google Wallet preinstalled on all Android devices. The deal with Softcard means that Google will now be in a position to run Wallet and tap-to-pay services on its own devices - putting it on a par with Apples Apple Pay solution.
At the recent Mobile World Congress, Google also announced its Android Pay API. Android Pay is a platform that enables developers to integrate mobile payments into their apps using an API.
The Android Pay API will unleash a wave of innovation from developers - allowing them to build apps for the billion Android devices shipped worldwide every year, and get a foothold with the billion that are about to come online.
Google will already be building partnerships with large retailers to develop highly integrated services - perhaps even as part of self driving cars in years to come.
Described by Forbes as democratization of working capital and billing itself as the worlds fastest way to get funds and grow your small business, Kabbage has rapidly established itsef as a leading provider of working capital to small businesses in the UK.
Entering the small business financing market in 2009 in the wake of the global financial crash, Kabbage is disrupting banks through its datacontext engine. The engine uses unconventional data generated through ordinary business activity - seller channels, social media and shipping data to evaluate small business applicants and offer fast, flexible funding.
For this reason, Kabbage is able to provide a decision on a loan in seven minutes, rather than several weeks, as is often the case with retail banks.
Being the first company to use the process of peer to peer lending for business funding in the UK has put Funding Circle on the map.
Bypassing the banks, Funding Circle acts as an online marketplace for business loans, allowing people and companies to lend to small businesses.
Once approved, businesses post their loan request on Funding Circle, and investors bid the amount of money they wish to lend, and the amount of interest they wish to earn.
Typically, hundreds of investors each bid small amounts of hundreds of different businesses to spread their risk.
As of 2014, Funding Circle had facilitated over 275m in loans to small and medium sized companies - a sign of things to come?
For decades, a handful of large financial institutions have dominated the business of international money transfer. Today, international money transfer is being disrupted by a new generation of digital peer to peer money services.
Transferwise allows people to send money abroad at the lowest possible true costs. Using only real exchange rates and small fees and backed by Richard Branson, the service makes it far easier for expats, foreign students and businesses to move money globally.
Transferwises innovative pricing structure provides customers with a low-cost alternative to traditional means of moving money internationally and allows Transferwise to position themselves as a consumer champion.
International money transfer is a lucrative business for UK retail banks, so Transferwise could represent a significant threat.
GoCardless is a UK-based service that allows businesses of all sizes to establish automatic bill payments, direct debits and recurring payments online using the Direct Debit infrastructure.
GoCardless is designed for merchants who cant, or dont want to take credit card payments, and makes it incredibly easy and cheap for anyone to take payments online.
Traditionally, only large organisations could gain access to the direct debit system, as banks were not willing or able to risk assess anyone else.
By allowing any business or individual to tap into the direct debit network, GoCardless opens up the direct debit to a vastly larger number of potential users.
The global financing market for FinTech has trebled in the last three years, to more than $3bn annually - and there is an unprecedented level of innovation in the FinTech sector.
The FinTech products being developed now will change the way customers interact with financial services, and make it easier for customers to change.
The growth of the FinTech ecosystem is placing pressure on banks to think about how they can break up the monolith and adopt new architectures such as microservices, but the banks have to want to change rather than merely protect declining business models.