directing funds towards productive investments.
More precisely, making money directing funds.
Banks are in the business of intermediating: getting buyers and sellers of risks together. Today's banks do a lot of that as well. For example, they originate loans to consumers and sell those loans to investors. In that process, consumers get inexpensive loans (than otherwise possible) and investors get paid for taking risks.
What happens in debt-driven societies, unfortunately for the banks, is that lots of consumers overestimated their ability to pay and see a larger and larger chunk of their income going to the banks (then going to the investors). Being stupid, those consumers resent the banks for (having made a loan to them and) insisting on getting paid, on behalf of the investors.
I think you will find a significant deterioration of standards of living in most western countries (Germany and Japan may be the exceptions) if the banking industry is as severely regulated as Ms. Warren had wanted.
To me, killing the banks is one of those examples where its advocates are too stupid to know that they are killing themselves as well.