They do not see it as a "threat" per se, because they can use it just like you and me. It could be decentralized and maybe they won't have the chance to have a power over it like they have power over fiat, they can't be bailed out neither because nobody can print more bitcoins to help them out, all of these are bad for banks and I understand why they would want something better suited for them.
However one thing is true, if you can make money from bitcoin, so they can, there is nothing stopping a bank to buy a billion dollars worth of bitcoin, which is why I think they are not worried all that much. Obviously they wouldn't prefer this, but they do not see it as a threat neither, they see this more like a inconvenience to their already working system to make them richer.
I disagree, they do see it as a threat, maybe not right now but they see the potential of the technology and they know they could be against their most fierce adversary yet, and just to show you how this can become true, banks charge a fee for many transactions, some are free but the major ones cost money and they take a percentage out of it, in the case of bitcoin the cost of the transaction will depend on how much you want to pay but the bigger the amount you want to move the cheaper it becomes and eventually a point is reached in which moving your money in bitcoin is the cheaper alternative.
Meaning that a wealthy person trying to make a transaction or simply move his money from one address to another will find this to be cheaper on bitcoin than in a bank and people for the most part will always choose the cheaper option which means that if bitcoin gets enough adoption people will begin to send more money through bitcoin than with banks and they cannot allow this to happen.
I believe this one factor is one benefit of crypto, transferring from one wallet to another will incur minimal fee as compared to using banks or other traditional remittance centers. I have seen that in some countries, the usage of crypto is more on remittance purposes. Some find out that sending money to their family via crypto is very favourable as they are not paying high transaction fees. And it doesn't matter if you will send good amount of money or not. And then from the other end of the world, what your family can do is just exchange the crypto to their local fiat. A lot of crypto exchanges are already offering the conversion of crypto to your local fiat. Just make sure to find a legit site.