A majority of banks around the world may not be economically viable if the global economy falters, according to a new study by McKinsey & Company.

Return on equity has fallen below their costs for nearly 60 percent of banks, which is financially unsustainable in the long run. A downturn in the economy, or even a spread of negative interest rates around the world, could make things even worse.

And banks face new competition from all corners, from fintech start-ups with lower costs to tech giants muscling into lucrative banking activities.

"We believe we're in the late economic cycle and banks need to make bold moves now because they are not in great shape," Kausik Rajgopal, a McKinsey senior partner, told Bloomberg. "In the late cycle, nobody can afford to rest on their laurels."

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