I mean, both things can be true?

I don’t think that’s true. They could both be aims, but one would be secondary (or at least not primary).

I don’t think they’re both true at all though. I don’t believe for a second the risk posed by/to users invested enough to root their phones is high enough to warrant this nonsense. The cynical/profitable explanation seems a whole lot more likely, imo.

Configuring one’s system to always login as root in Linux is significantly easier than rooting an Android phone. One needs to know their way to root their phone and spend significant amount of time tinkering with it so that everything works properly.

As for malicious apps, there are many such apps on the Play Store as well. In fact, I would argue that the safest distribution channel is F Droid and not Play Store.

I can’t speak for foreign banks but for banks in my country, they have a problem that is way way worse than any Android stuff can solve ( read: giving access to your account only via SINGLE password and only asking for SMS OTP when transaction is done; and of course no hardware key support). I don’t wish my banking data to be less secure than a WordPress account!

I know banks are pushing on Google to improve Android security, to avoid malicious apps with root access from messing with banking apps.

How do you know this? Do you have a link to a source that says it?

I’ve tried (not especially hard) to find sources in the past citing actual incidents where end-user devices running non-stock Android or with root access led to bank fraud or data breaches. I didn’t find anything to suggest that’s a problem in the real world.

The main malware problems I have seen reported for Android are:

1. Malware in the Play Store. This is the only way I’ve seen Android malware in the wild, on a family member’s device.
2. Zero-click exploits. The best prevention for these is an up-to-date OS. On an older device, that means a third-party build that won’t pass Google’s checks.

GrapheneOS is more secure than Google stock.