"There's an enormous change that is going on that's changing customer's needs, customers preferences, causing us to invest heavily in new capabilities and compete with potentially new competitors, like the Google and Facebooks of the world," he said in an interview following the announcement Thursday.
Chief executive Gord Nixon will retire effective Aug. 1, 2014 after 13 years as RBC's president and chief executive.
McKay, the head of personal and commercial banking, will be appointed president at the bank's annual meeting on Feb. 26 and officially take over as CEO on Aug. 1.
Royal Bank (TSX:RY) is the third big Canadian bank to announce this year that its chief executive would retire. Scotiabank's Rick Waugh retired from the chief executive job last month, while TD Bank chief executive Ed Clark announced plans to step down on Nov. 1, 2014.
On Thursday, Royal Bank reported that its fourth-quarter profit was up 11 per cent from a year ago and saw a record annual profit in 2013.
Nixon, 56, told analysts during a conference call that he knew when he presented the board with the bank's five-year strategy that it was time for him to go.
"It was clear to me that someone else should take the lead as they would ultimately have the accountability for its performance," he said.
McKay, 50, said he carries responsibility for the five-year plan but he also will ensure that RBC is set to embrace new technology.
"It's about recognizing over the long term that Canadians will be using their mobile phones to manage much more of their commercial lives and you have to build into that, experiment and learn to get it right," he said.
McKay's background is in retail banking, but his focus will be wider in the new role.
"The retail bank will always have a special place in my heart," said McKay. "But I will focus on businesses that are most important in driving the future success of the organization as any leader would. You have to separate yourself from where you've been and where you need to go."
Royal Bank said net income rose to $2.12 billion, equal to $1.40 per share in the quarter ended Oct. 31, and an increase from $1.91 billion or $1.25 per share a year ago.
The results beat analyst expectations with cash earnings per share coming in at $1.42, four cents higher than the average analyst estimate compiled by Thomson Reuters.
Revenue increased to $7.97 billion from $7.52 billion a year ago.
RBC's main Canadian banking arm reported $1.08 billion of net income, an increase of five per cent or $47 million from a year ago.
The bank's capital markets division was one of the best performing divisions, with net income rising 15 per cent to $472 million from $410 million. However, Royal Bank faced turbulence in some of its other key divisions.
Barclays analyst John Aiken said it "initially looks like a pretty good quarter but... as we chip away at the results, they begin to lose some of their lustre."
In a note to investors, Aiken pointed to both the RBC wealth management and retail banking divisions as performing weaker than he expected.
He said the retail division had a decline in margins and only slight growth in assets. In wealth management, net income was relatively flat at $205 million from $207 million a year ago.
Profits at RBC Insurance were sharply lower, falling 45 per cent, as the bank took a pre-announced charge of $160 million tied to changes in how the federal government taxes individual life insurance policies.
For the full year, Royal Bank reported net income grew 12 per cent to $8.43 billion from $7.54 billion in fiscal 2012. Diluted earnings per share was $5.54, up 61 cents from $4.93 per share.
Shares of Royal Bank closed down at 83 cents, or 1.2 per cent, to $68.17 on the Toronto Stock Exchange.