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If the banks opt for Option 1, it's the telco space revisited - the classic banks become the money versions of dumb pipes and new and innovative finance products will roll over them.

As @James says, there are ways they can add more value - there are gaps in API coverage that I know are causing pain for providers used to screen scraping - but who aren't quite as digitally native as they could be - charge more for what they need. 

Realistically, as @Benny aludes: the cost to acquire the skills to operate and maintain an API infrastructure has to be expended. Whether they do it now because the regulators demand it or in 5 years when their IT systems aren't fit for purpose this is happening - (insert any number of metaphors about ships having sailed etc...).

What I can predict is this: banks who only play lipservice to building out their APIs and building a maintainable and rational developer strategy for 3rd parties are going to find that was a really expensive decision in the future.

A part of the problem really is the idea that this something that should be done and should have been done anyway, and the regulator piece gets in the way so some quarters are seeing it as a box ticking exercise.

We see the same with a lot of services where the quality and monitoring is seen as a thing to do rather than the point of having a service that does useful things for people.

My concern for Open Banking remains the same as it ever has: if the banks don't see the value and focus on why they need to do this they'll find themselves blocked out of new and innovative solutions. The carriers did exactly the same thing with messaging services and I can see a lot of the banks ending up in the same place.