DeFi or decentralized finance can threaten the world of traditional banking, because of the shift in lending, even DeFi itself is known to be able to provide loans like other traditional banks.
This can affect existing traditional banks, because there will be competition between traditional banks and crypto in general, regardless of the various problems that will occur, crypto and traditional banks must be able to adapt to each other.
Crypto development is progressing so rapidly, this can be seen from the many users who join here, if Traditional Banks close themselves it is not impossible to be abandoned in the next few years.
I think it is very much possible that traditional banks are also adding crypto in whatever form to their portfolio of products. The thing is though if those banks really want to do that because in the end crypto was invented to create a financial system that gives the power back to the people and that can not be controlled or even stopped by banks or the governments. I also can imagine that traditional banks are afraid to become irrelevant if they are offering crypto services, because i would guess that a lot of new customers that would use those crypto services would find out sooner or later that they could do all that Defi stuff by themselves without paying an extra fee to the bank.