SEPA was a pain for us citizens anyway because now we have to use huge long account numbers even locally within the same country. I never understood why that had to be the case, just leave that for international transfers.
So you do need SEPA normalization; otherwise that can't work. It's hardly a problem, and the fact that it required a regulation just shows how ineffective governments are in practice.
Fintech banks came up with an easier-to-use, more efficient, and more convenient system in less time than it took them to do this. And they manage to be cheaper.
The problem with banks is entirely regulation related; they are established players, working with/for the government, and basically get rewarded for stealing. Once I had a problem with my legacy bank, who robbed me of over 1k euros because they were generating 150-euro letters to tell me they refused a government tax debit for a lack of provision (mind you, the rejected amount was 50 euros, less than a third of their fee for rejecting it).
As far as I'm concerned, banks are legal criminals, enabled by the even bigger criminals running governments.
Also, how much longer are they really than legacy national standard ones? In the countries I'm familiar with, they've added exactly four characters: The country code in positions 1-2 and the robust, standardized check digits in position 3 and 4.
Both are extremely worth it, in my opinion. Take a look at ACH in the US if you want to see a great example for how not to do it: No checksums, two fields instead of one (ABA routing number and account number), separate routing numbers per domain (some banks have different numbers for wires, and some even for checks and ACH) etc.