Australia's big four banks enjoyed a $30 billion profit bonanza in 2015 but experts predict it's going to be a hard act to repeat.
Westpac on Monday rounded off the annual reporting season for the banking giants with a record $7.8 billion cash profit on the back of increased home loans.
But Westpac, like its rivals, is bracing for a slowdown in earnings as the housing market slows and regulatory requirements rise.
Analysis by major accounting firms EY, KPMG and PwC suggests the big four need to focus on innovation and technology to power their future earnings.
KPMG Australia's head of banking Ian Pollari suggested the banks should focus on improving customer service and reduce costs by expanding their digital offerings, particularly in their branches.
He said the banks also needed to balance the challenges of increased competition and lending losses with generating returns for shareholders.
"Real courage will need to be shown by bank management over the next few years, and if banks push too hard on maintaining short-term return to shareholders they risk significantly damaging their long-term franchise value and reputations," Mr Pollari said.
EY says lower interest rates, increased competition and tougher regulatory requirements on the banks to hold more capital to protect them against future financial shocks will all pile extra pressure on their profits.
Mortgage arrears had begun to tick higher in the resources states of Queensland and Western Australia, while the property boom in Sydney and Melbourne was slowing.
"Slowing growth and declining returns are a clear signal that we've reached the end of the banks' golden era," EY's Oceania banking and capital markets leader, Tim Dring, said.
"In order to continue to prosper in this new environment, banks will need to refocus on core businesses, redefine their structure and reshape their businesses through technology."
PwC's financial services leader Julie Coates said the fact the big four invested $2.1 billion in transformation and productivity improvements, including technology, during 2015 suggested they were aware of the need for change.
"We expect careful balance sheet growth guided by business reshaping and investment in innovation," she said.
"A lot of this innovation is refining lending and consumer-focused practices."
BANKS BASK IN PROFIT BONANZA FOR 2014/15
* ANZ: $7.2b, up 1.0pct
* Commonwealth Bank: $9.15b, up 5.0pct
* National Australia Bank: $5.8b, up 15.5pct
* Westpac: $7.82b, up 3.0pct
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