That's why they have to resort to nagging to get you to install it.
If they made it a condition for service they would be on expensive dodgy ground legally.
They obviously think that nagging you everytime you log in and some bint that doesn't have clue about computer security lecturing you when you have an interview with the bank is acceptable.
But to be honest personally I feel that its similar to loan insurance if anything nasty happened they could be in trouble for false information.