Can bitcoin really compete with traditional finance? Absolutely.
Saying bitcoin wont work because it cant replace the complexity of traditional finance and money markets, is like saying automobiles will never work because they cant replace the complexity of the methods used to breed, stable, feed and train horses.
Everything traditional finance does today will be done over bitcoin programatically and probably in a completely decentralized manner.
Everything traditional finance can do today can and will be done on bitcoin except more efficient, cheaper, global and available to anyone with a $10 smart phone.
Central banking has already been automated, LN is the entire global payments industry, P2P lending with oracles and reputation will replace traditional lending, and interest rates will be based on supply and demand of savings.
Productivity creates more supply, more supply lowers prices, lower prices lead to higher levels of savings, and higher levels of savings will lead to lower interest rates. In a world with a non-inflationary monetary medium like bitcoin there is no upper limit on productivity, no over heating of the economy. Inflationary money like fiat requires high interest rates and high unemployment to prevent CPI inflation, but with sound money increased productivity and zero unemployment just leads to increased supply and declining prices of goods and services for all.
Bitcoin will do everything traditional finance does but better and available for everyone everywhere, all while allowing us to live in our natural state of low/no unemployment, low interest rates, constantly increasing productivity and a constantly decreasing cost of living leaving everyone better off over time even if you never get a pay rise.
The countries that adopt bitcoins sound/strong monetary policy will become the switzerlands of the world while those that dont will become the venezuelas of the world. Until all countries eventually adopt btc because that will be the only way to be recognized as a legitimate nation. At that point the whole world will be on the same level playing field, making weak-currency-policy induced poverty nothing but a chapter in the history books.
Bitcoin really does take us in the right direction as a human society towards global equality by putting every human on the same level playing field.