An in-depth study by Temenos and The Economist Intelligence Unit found that banks see big tech players like Facebook and Apple as the biggest threat to the banking industry in APAC.

Thirty-two percent of respondents said technology players such as Google and Facebook are the biggest competitors coming to banking, followed by 28 percent who say payments players such as PayPal and Alipay will be the biggest competitors.

Only 25 percent believe that neobanks such as Volt or Monzo will be the banking industry’s biggest competitor by 2025.

This is despite the launch of several neobanks in Australia such as Volt, 86,400, Xinja and Judo Capital.

Volt Bank CEO and co-founder Steve Weston told the report that neobanks have been able to take advantage of high interest margins and use them to better manage customers' finances.

"Clients tell us they want someone who understands what they're trying to achieve in their financial lives and who helps them achieve those goals," he said.

Other threats to the banking industry include partnerships between technology and fintech companies, robo-advisors and peer-to-peer lenders and aggregators complementing the others.

Temenos APAC managing director Martin Fricke said bankers in this region are aware of the challenges they face.

"Asia-Pacific bankers are aware of the race they are in against tech giants who have the capital and scale to take market share from established players," he said.

The threat from technology is also seen in the impact trends, with 50 percent of banks believing that new technology will have the biggest impact on their operations by 2025.

Emerging digital regulation and a changing competitive environment also raise concerns for banks, but interestingly, only 25 percent believe open banking will have an impact by 2025, despite the regime already being introduced in Australia.

One of the reasons for the lower ranking of open banking is that while it is government-led in Australia, in other markets it still has no government framework and is run by the players themselves.

Given the challenge presented by technology, digital marketing and engagement were ranked as top priorities by 2020, followed by improving product flexibility.

Until 2025 banks' priorities are changing to include migrating customer usage from physical to digital channels, launching open banking strategies and offering hyper-personalization to customers.

Mr Frick said banks knew digital was the only way to stay relevant and said banks needed to master it quickly.

"To stay relevant, retain customers and appeal to the evolving demands of younger generations, banks need to master digital engagement, and fast," he said.