Well, I like the idea that banks are moving to the next level of adoption. Crypto space now is getting bigger and wider, banks adoption could make the system build stronger and they are also benefiting this one. Instead of showing no interest in crypto and work against it (before), it is best to go along with the market changes and listen to the community.
We are not living in fiat forever and embracing digital innovation like Bitcoin is heading for a better future and new lifestyle.

+1 for this we already have control over our crypto we own our wallet and could sell our crypto whenever we want through exchange.
We don't really need to give out our privacy for it.
It is like giving out our control over our own money again and relying on banks again.

Banks have started to do so and they have to do it also. Because this is very crucial for their future I believe. If they all don't want to bankrupt at some point, they must accept digital currencies. And it is for the benefit of them if they start doing it right away. When fiat money becomes worthless, they will continue with digital ones.

And that's precisely why the banks want to find a way into the picture, as they do with assets that can't directly regulate; Creating a faux need for a middle man and then filling that gap, even though it's not needed as this is a P2P network.

I think it's more a case of people being lazy, than loss of privacy being inevitable. Bitcoin was designed to be private and yet it was adopted during it's early years (without institutional backing), and that adoption grew enough to attract banks, funds, companies, governments, so it can very well keep growing as it is, only maybe at a slower rate.
Users give up their privacy because they never really valued it and only use Bitcoin cause it has speculative value and not cause of its qualities.

Simply because if Bank accounts have it, people can also store Bitcoin in bank accounts/wallets and perhaps benefit from the same deposit protection that they do with fiat (all banks in countries protect deposit with national insurance). Not that this is totally good since it defeats the purpose of Bitcoin which is to be in full control of your money but for most people, this is what they're looking for when buying crypto.

There has been banks accepting bitcoin and providing some crypto services, I remembered I read many of such news mostly in 2019 about few banks in USA starting and providing crypto custody services.

CBN only ban bitcoin in your country, it is not banned by the legislative signed by the exicutive, so you still have right to do anything you like with cryptocurrencies in your country, but not linking it to bank transactions like buying cryptocurrencies from crypto institutions directly using bank cards, such transactions will not even be successful.

Using vendor can come with risks, why not use a reputable exchange for it that can serve as an escrow. Bank crypto custody is not safer than a mean privacy will be lost, I do not against it but I will advice people not to try custodial services, noncustodial is better for total control and privacy.

P2p is better while the same aim is achieved but privacy is intact especially if it is decentralized exchange, but for convenience, zero fee, fast transaction with high volume and high liquidity, custodial exchange can be of help, and yet no direct link to bank, but though no full privacy and no total control.

One thing that can be certain when the banking sector starts these business is the trust level we can have when they conduct business and you do not need to have sleepless night about the wallet hack and even if that happens it will be insured and since the cryptocurrency market has witnessed many scams and hacks and these centralized banking wallet will help people who are lazing and looking for centralized wallet.

Adoption of bitcoin is really increasing and I think Banks allowing people to buy and sell on their platform will help to gain more trust from the people to cryptocurrency. But what about the privacy and decentralization of bitcoin? Well, whatever the outcome, I am also happy if banks accept the digital currency because it will be the proof how much successful and useful the cryptocurrency nowadays.

I agreed that banks wants to tap into the numerous opportunities abound with Bitcoin demanded by some society which is absolutely a good development meaning more adoption of Bitcoin however a lot of Bitcoin enthusiasts are primarily into it because of it privacy and store of value also avoiding a third party if hodlers decided to embrace depositing with banks those those features will be eroded however I believe this is a matter of choice hodlers who does not values the mandatory  KYC requested by most banks can deposit there Bitcoin with banks but I am very sure of people choosing their privacy as the most priority.