TCA Consulting said today that it believes the UK could join the euro by January 2004 - so financial services companies must prepare.
It added that the transition process could be complete as early as January 2005.
The consultancy said that current information about the industry shows many companies could be left "dangerously unprepared" if they do not act immediately.
TCA principal consultant John Turner said: "Failure to prepare leaves institutions dangerously exposed. Such organisations are forced into last-minute solutions, which frequently involve an unsatisfactory level of customer service combined with excessive manual effort to support their inadequate computer systems.
"Increased cost, extra operational risk and loss of customer confidence are the three main consequences, and regulators (such as the Financial Services Authority) take a very dim view of this."
