Everything you said is correct, which is why, for example, our Congress just passed a new law (revising a 1933 law) allowing banks and brokers and insurance firms to merge, without any privacy protection for their clients. Ergo, for example, in a new and large behemoth incorporating all 3 services, the insurance branch can pass along medical information to its banking branch (say, about that chronic disease you have), and presto, no loan for you. Why did this horrible law pass? Banks & brokers & insurance companies pumped millions into Congressmen's coffers -- money these whores can then pump into televison ads to get reelected.
As you rightly point out, the system stinks.