It's rather the excess of regulation due to anti-bank sentiment that creates these barriers to entry. Banks are rather calling for less regulations, and when they got it their way in the 90s, it is what happened.
But it is true that the excess of regulation is reenforcing the position of the incumbents. Banks have to staff full time employees just to read the amount of draft regulations and consultation papers published every day. A start up stands no chance in that environment.
They fight the regulations that eat into their profits and back those that help them. During that same time in 90's, they fought for stronger regulations on credit unions and still do. The also push against the alternative, local currencies because it's less money in their control. Their best ones, though, are in court where they push for low security of ACH and for liability to be on consumer when banks screw up.
Fighting entrenched bankers is one of the hardest uphill battles one can get into. Not so smart.
It is not a binary "banks always want less regulation". Banks, like other entrenched interests, will be for or against regulations, depending on if they advance their interests or not.
You see this in every industry. The energy industry hates environmental regulations, but they like more regulations when it serves to diminish the viability of alternatives like solar.
But it is true that the excess of regulation is reenforcing the position of the incumbents. Banks have to staff full time employees just to read the amount of draft regulations and consultation papers published every day. A start up stands no chance in that environment.