You can apply leverage to almost any business model.
E.g. seems to be some overlap with the pawn broker lending business here in my view.
Here in the UK lots of moderately wealthy but illiquid individuals keep their illiquid collectables (art, wine, cars, jewelry) with upmarket pawn brokers, who store their stuff securely and provide them with a healthy loan to value. Most of them pay the loans back, and many of them do this continuously.
Otherwise I agree on the labour intensive, hard cost part.
it seems perfect for automation. just a box retrieval system. all that the bank should add is physical security.
that said, banks are providing the usual shady upsell shit (loans, mortgages, credit cards, "premium" services) and that market is already pretty competitive, but basically it's not "free" because the costs of the labor intensive internal workings of these non-slim companies (plus regulatory compliance)
I don’t know much about the private ones (there aren’t any near me) but I’d imagine the market is less in demand than compared to the past. The high end of this market buys their own vaults, and the lower end of this market no longer stores wealth in physical form. My grandma had stock certificates and gold coins. People today have 401ks.
After all, it was never a primary business for banks, it was just a value-add.
Then there's the self-storage market that takes a good chunk of this now, they're secure enough for grandma's heirlooms and you get a significantly bigger box.