Digital-only banks operating in the U.K. could amass a total of 35 million customers globally within the next 12 months — up from 13 million today — based on current growth rates, according to new research from Accenture (NYSE: ACN) which tracks the performance of UK digital banks. In the first six months of 2019 alone, five million people opened an account with a digital-only bank.

Digital-only banks are accelerating customer acquisition at a current growth rate of 170% as they launch new products, widen their customer base beyond millennials and expand into new markets. A number have cited that their average customer is aged around the mid-40s, and many reside outside of London. These players have also increased the average deposit balance fivefold from around £70 to £350 per customer in the first half of 2019.

Digital-only banks are also reaping the rewards of improving the customer experience as they gain an average Net Promoter Score of 62 compared to just 19 for traditional banks. They also retain a significant cost advantage with the average operating cost per customer at £20 to £50, compared to over £170 for a traditional bank.

Tom Merry, managing director at Accenture Strategy, said: “While digital-only banks are popular, they are not yet universally profitable and customer acquisition alone does not guarantee long-term success or competitive agility. These banks evidently show great promise. They have been a catalyst for positive change in banking, but there are deeper issues that need to be addressed as they scale.”

Challenges impacting digital-only banks include the reality that the majority are still not profitable and are on average losing £9 per customer. Account switching remains low across the industry and while digital-only banks are now gaining primary account customers and larger balances, the pace of growth is slow. Regulatory hurdles may grow in response to governance and control issues these banks face as they scale, which could impact consumer trust at a time when trust in traditional banks is increasing.

While digital-only banks gain momentum, traditional banks remain the preferred primary account holder for most consumers. Furthermore, incumbent banks are investing heavily in digital to provide a better experience for customers, with an initial focus on transforming their existing infrastructure, and several are launching their own new digital banks.

“Core challenges in terms of balance sheet scale and funding, risk management and compliance cast some doubt over whether convenience, customer experience and the cost advantages of digital-only banks are enough to ensure long-term success. It remains to be seen whether there will be a radical overhaul of the banking industry as a result of these new entrants, or simply a continued evolution,” concluded Merry.