Multiple devices is the answer. Otherwise you end up with people having their banking hacked because they installed a game mod.
Personally I’m ok with the bank being on the hook and their app checking there isn’t malware loaded on the OS. I have my raspberry pi and steam deck for full modding without intermingling it with extremely sensitive computing.
define "malware".
Users would also lose them far more than they lose their phones.
In both cases the authorisation challenge/response involves part of the destination account number, so if the details are tampered with by malware the code won't work.
Remote attestation doesn't check that there isn't malware; it checks that the OS is approved by one of a short list of corporations. Passing that check is correlated with a reduced risk of certain types of malware being present, but is not quite the same as checking for malware.
/s
For example, an application needs "access to your disk storage", because it needs e.g. to save photos. Okay, let's give it access to its own directory. Or maybe to a subdirectory of "my pictures". But it doesn't need the access to the entire disk, right? Yet in Android, it is all or nothing.
Perhaps with better system, we wouldn't have to ban installing game mods, only to make sure that those game mods do not have unreasonable access rights. Or maybe the banking operation could state "I can only be installed when no other app has an access to my private data" or something like that.