Maybe the answer is to put whatever the banks etc need on something like a smartwatch. Smartwatch + phone is better than two phones IMHO and they're so tedious to use/install anything on that it reduces the attack surface for hackers etc. Tap to pay or digital signatures or identity, passkeys etc via a smartwatch interaction seems like a good use case. Sort of a souped up yubikey. I don't know how good biometrics is on watches nowadays but my Pixel phone has some sort of camera behind the screen to read fingerprints so I can't imagine its impossible. Even adding a capacitive pad on a band seems plausible. Who knows, I don't feel like biometrics have been a real focus of design in the smartwatches I've used.

Personally, I have found smartwatches fairly useless (I do enjoy the activity tracking and notifications but that's not much really) so freeing my phone from bullshit by moving some functions to a watch could increase the value/utility of a some sort of smartwatch. Ultimately, it doesn't need to be that "smart" even.