So basically they're just using this technology to ease online banking, not really to make their own currency.
It'll probably pegged to a dollar or to whatever currencies they're dealing with
Probably, because who wants to use a currency that is developed by a bank? Heck, most of us are only forced to use fiat just to make our financial transactions. And also I don't think many people wouldn't see the use of it. Bitcoin isn't that widely-used yet; not even known to many places in the world. So why would a bank create another one knowing that its predecessors are not that widely-used by people yet?
They are merely using the blockchain technology and nothing else. Doesn't mean that it will be in direct competition with bitcoin nor will it affect bitcoin price. Even if they have their own cypto what people are still interested in is the decentralized function. Not having that doesn't sound like crypto in the first place.
Bitcoin's main asset is the block chain public ledger. The technology in it is what lures other financial institutions to create a similar thing thinking that it would also be big as bitcoin, but no. I agree with you on the decentralized function, but I don't think the general public is even caring in that matter.