McKinsey's latest Asia-Pacific Banking Review reports that the region's smaller, less efficient banks will disappear, either through acquisition or through losing their most profitable businesses to emerging fintechs - or "digital attackers", to use the consultancy firm's parlance.But there is hope for those banks that develop "best-in-class" digital and analytics capabilities to capture new revenue in four fast-growing businesses: wealth management, retail lending, small and medium enterprise lending, and transaction banking. "There is a US$100 billion annual opportunity for new revenue spread across these areas," McKinsey predicted."Bank lending to SMEs in Asia-Pacific is expected to grow 9.1 per cent annually to US$23 trillion in 2025."In its analysis, however, the report provided precious little insight or compelling data for the Australian and New Zealand markets to justify assertions that "banks must reinvent themselves as digital-first, data-driven organisations and brace themselves for change or possible consolidation."And with McKinsey seemingly intent on maintaining peaceful relations with existing and potential clients, the banking royal commission, the increasingly large fines imposed by regulators in recent times, reputational damage and the subsequent shedding of unprofitable businesses by Australia's majors - including wealth management, one of McKinsey's favoured growth generators - were ignored. The consulting firm instead wanted pin a 2 per cent decline in the sector's profitability on factors such as: margin compression (down 2.6 per cent) and capital efficiency (negative 1.3 per cent impact), tempered by stronger productivity (a positive of 1.2 per cent).McKinsey also predicted: "Not everyone will survive and thrive. Banks have wide variation in market share, suggesting the potential for consolidation as smaller banks will struggle," the firm warned.The report's authors do concede, though, that "there is considerably less room for consolidation in Hong Kong, Singapore, and Australia, but some banks, nonetheless, may seek synergies through a merger or acquisition."