Would banks even have an incentive to innovate?
The simple answer is no. Unlike competition which can be in various industries, these guys control the corrupt system together. Unfortunately the majority of the people are not even aware of it. These are nice (Bitcoin-related)
documentaries such as this one, that everyone should definitely watch. It gives you at least a little inside of the 'magic money making machine'. The main reason that these banks are focusing on the 'blockchain' (a private blockchain is nonsense) is to divert attention away from Bitcoin itself (as they could lose everything).