Despite recent changes at banks such as faster promotions intended to retain employees, many firms are still in danger of losing top talent, according to a new report.
The study, released on Wednesday night by consulting firm Quinlan & Associates, said some banks are incurring up to $1 billion in costs annually associated with replacing employees who leave voluntarily.
With Wall Street firms bleeding talent to technology firms and compensation on the decline, numerous banks face a brain drain that can only be solved by radically shifting their cultures, the study said.
It also warned about the potential for a future leadership crisis in the banking sector.
"Only when there is a fundamental re-engineering of a bank's DNA to deliver a more holistic career proposition will they see a meaningful, lasting change in perceptions towards the industry as an employment choice," the report said.
The problem stems in part from the financial crisis, which hurt public trust in the banking sector and made it a less desirable workplace.
The industry has continued to be hit by an onslaught of fines, scandals and litigation over the last several years, while cost-cutting has eliminated hundreds of thousands of jobs.
Global headcount at the world's 15 biggest banks is down 12 percent from 2011 to 2015.
With their reputations burned and the ax-wielding showing no signs of ending, banks have fallen out of favor as employers of choice for top business school programs, the study said.
Banks are also having a more difficult time retaining current employees, with bonus pools on the decline and U.S. and UK regulators stepping in to curb compensation.