Stop parroting the corporate propaganda that put us into this stupid situation in the first place. Having root access on devices you own should be a fundamental right, as otherwise it's not ownership.
These restrictions extend outside the particular device. It must also be illegal as a commercial entity to enforce security schemes which involve remote attestation of the software stack on the client device such that service providers can refuse to service clients based on failing attestation. Service providers have other means of protecting themselves, taking away users control of their own devices is a heavy handed and unnecessarily draconian approach which ultimately only benefits the ad company that happens to make the software stack since they also benefit from restricting what software users can run. Hypothetically, they might be interested in making it impossible to modify video players to skip ads.
1. Devices should be allowed to display a different logo at boot time depending on whether the software is manufacturer-approved or not. That way, if somebody sells you an used device with a flashed firmware that steals all your financial data, you have a way to know.
2. Going from approved to unapproved firmware should result in a full device wipe, Chromebook style. Possibly with a three-day cooldown. Those aren't too much of an obstacle for a true tinkerer who knows what they're doing, but they make it harder to social engineer people into installing a firmware of the attackers' choosing.
3. Users should have the ability to opt themselves into cryptographic protection, either on the original or modified firmware, for anti-theft reasons. Otherwise, devices become extremely attractive to steal.
I should note Google has such an attestation scheme, and there are reliable defeats for it in most situations given root access. Apps have been able to insist on hardware-backed attestation which has not been defeated for some time, but that isn't available for old devices. Almost none do so.
If this had a meaningful impact on fraud, more apps would insist on the hardware-backed option, but that's quite rare. Even Google doesn't; I used Google Pay contactless with LineageOS and root this week. I'm currently convinced it's primarily a corporate power grab; non-Google-approved Android won't be a consumer success if it doesn't run your banking app, and the copyright lobby loves anything that helps DRM.
You could also imagine having them integrated directly into the phone, but with a physically separated button or fingerprint reader to authenticate. The TAN generator could even have the ability to override the display to replicate the UX of authenticator apps.