There is a cost to making a good app.

That cost is actually reduced in the open source world. Wheels need not be reinvented. The bank would only have to code a few basic features as an example, publish the API, and let the community develop their app at no cost to the bank. The bank would only have to finance the code audit and acceptance, which the commercial software producer must do anyway.

For example - I’m currently using a bank because their app is awesomely good (compared to other banks).

Surely you have a low bar for what’s good. Just about every banking app I’ve encountered is not even downloadable unless you have a Google account. That already crosses the enshitification line. You have to create a Google account, share your personal phone number with Google, agree to Google’s terms, let Google harvest your IMEI number, let Google keep track of where you bank (since it tracks every download), trust Google not to sell that info to debt collectors, etc. Then once you have the app, it likely detects and refuses to run inside a VM, thus forcing you to buy new hardware to keep up with updates. Then the app likely has spyware therein simply judging from the excessive perms they tend to require.

Why would they open source it - it means customers might go to other banks who do better on interest rates, or fees.

Are you saying a FOSS app from bank A would simply work on bank B? That they have the same API? Perhaps, but that can be controlled by using a unique API.. though indeed that protectionism would incur an extra cost.