Banks compete in 2 main areas: interest rates and services. TD Bank has a far better service offering than Citibank, Chase, etc. TD Bank offers ATM fee reimbursement anywhere in the world, much longer branch hours, free coin counting, nicer employees, etc. And yet TD Bank is not crushing the competition. TD Bank's better service offering is not enough of a competitive advantage to offset the stickiness of commercial banking.
A person's main checking account is a pain to transfer for most people. To change your checking account you need to: 1) Wait days for the new account to be approved and initial transfer to clear 2) Wait to receive new checks 3) Reset up your recurring bill payments
The reason that most banks don't innovate is that customers move to better banks very slowly.