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ndonesia'€™s banks have a new threat and opportunity: Competitors ranging from technology and telecommunications companies to consumer retailers and travel agents are using digital technologies to edge-in on the retail banking landscape. For banks, the competitive challenge is not just in making their traditional banking products and services more digital, but in using technology to create a deeper and more valued role in the digital lives of their customers.

You don'€™t need to think about '€œbig bang'€ industry disruptions '€” like Apple'€™s impact on music retailing or Google'€™s impact on the GPS industry '€” to get the point. All around, we see other industries moving closer into financial services with remarkable success. For example, in Singapore, SingTel'€™s mobile payment service for smartphones lets customers make cashless payments at more than 20,000 locations '€” ranging from supermarkets and fast food chains to taxis.  What started out as an easy transit payment option, is now regularly being used in lieu of cash, debit or credit.

In Indonesia, the rise of Kaskus, an e-market forum with more than 4.5 million registered users, has developed its own digital payments system for its site called KasPay. It is also looking to roll out a third-party website that could become the Indonesian version of PayPal.

The risk for Indonesian banks is that these new digital entrants, in their quest to offer convenience to their customers, will continue moving deeper into financial services and either steal the retail market from under the banks or confine banks to a utility role. Being at the front guard of the entry gate to the digital life of customers is becoming the real quest. Are banks ready for that quest?

Accenture research shows that digitally contestable markets are set to grow faster than traditional sectors; but the incumbents stand to lose business. We estimate that one-third of traditional banks'€™ market share will be at risk by 2020 due to new entrants.

A good example of the potential speed of change is in China, where only three years ago Alibaba, China'€™s equivalent to Amazon, began taking deposits from customers who had made a purchase but then had some money left over. The company applied its own data analytics to assess creditworthiness of small business. Today it is a US$16 billion lender and '€” only seven months after acquiring an asset management firm '€” is also China'€™s largest seller of money market funds.

Banks need to be proactive and fight back. Payments alone can account for up to 25 percent of bank revenues, and are a key touch point with customers. The vast information banks have positions them to help customers not only make payments but also to reach decisions on what to buy, when and where. If they offer more than just banking services they stand to become trusted and indispensable to many of the everyday activities of today'€™s consumers.

Standard Chartered is on the right track. It has turned the disadvantage of restricted branch licensing in markets in Asia-Pacific into an advantage by leveraging digital channels to win customers. The bank launched '€œBreeze Living'€, a lifestyle smartphone app '€” available in Malaysia, Singapore, India, China, Hong Kong and Korea '€” that offers open, social and location-based mobile discount coupons. According to the bank, more than 1 million users around the world have downloaded Breeze.

The bank positions the app as every bit a tool for better living. For example, last year, Standard Chartered Bank recruited two veteran mountaineers for an expedition to Mount Everest where the climbers tested the bank'€™s Breeze mobile banking app at world-record setting altitudes. They conducted funds transfers at 6,500 meters and confirmed account balances at 8,000 meters '€” proving no place was too remote for mobile banking. That'€™s everywhere banking!

In Malaysia, Maybank has turned to television to become more involved in peoples'€™ lives. It is behind CashVille Kidz, an animated series that airs on Astro, Malaysia'€™s largest cable television provider. The series, which teaches financial literacy to children has about 1 million viewers and earned 125,000 Facebook fans in less than six months and a YouTube channel with more than 2 million views.

Consumers expect more

In the digital world, customers are driving the changes '€” they want to decide how and when to do their banking. And they want more information because they know it is possible.  Within five years, at least three out of every four customer interactions with banks will be online or mobile. Less than 5 percent by some estimates will be taking place in branches. While banks will need to invest in this digital future, the payback is that it not only expands the customer relationship, it also reduces operating costs by automating systems and processes.

Take the example of the biggest purchase in most people'€™s lives: their home. In Australia, CBA offers home-buyers customers an app that allows them to simply point their smartphone camera at residential properties to bring up property details, recent sale prices and information on local neighborhoods '€” as well as estimated monthly payment amounts on CBA mortgage loans and insurance.  With an average of 20,000 property searches per week, CBA is clearly on to a service customers want.

In the US, BBVA Compass helps its customers looking to purchase a new car by providing information not only about loans and insurance but about the actual selling price of cars to help them negotiate the best deal.

These are the sort of services banks in Indonesia need to embrace as players from other industries increasingly use digital technology to move into financial services. If banks learn to use digital technology to help customers find deals and better manage their lives, they will not only transform the role they play but also assure their future.

Beat Monnerat is Accenture'€™s managing director responsible for the client service group for financial services in ASEAN as well as for analytics for financial services globally and Juan Pedro Moreno is senior managing director and head of Accenture'€™s global banking industry practice.