It’s easier to monitor the entire system (including individual accounts) and collude with the entire industry on regulations/policy. In other words it makes it easier for them to implement more regulations (which usually always ends poorly).

Less banks also allows for more predatory lending. Regional/community banks are usually the least predatory, if only the big boys are left they can essentially do what they want with loan terms because you would only have a few other options (who would probably offer similar terms).

Also makes it much easier to launch a CBDC program since that would require partnering with the banks. Fewer banks requires less parties being on board.