> I've spoken to friends who have foreign relatives and they've also pointed out the problem the UK has which is
Lots of countries have this circularity, including Continental ones with ID systems, and I think it's an intentional anti-immigrant measure.
It is not a problem to open a bank account with a foreign passport in the UK, and most banks have accounts for those who've just moved to the UK. Hundreds of thousands of people move to the UK every year...
Which has no relation to Digital IDs whatsoever... and again most banks have accounts that cater for this situation.
For a while the UK had the stupid situation where there was a high-security biometric identity system, but only for immigrants, and one of the things you did as part of the process of becoming a citizen was the requirement to hand back or destroy the ID.
(this of course tells us where all the ID pressure is coming from: voters want an identity system that can be weaponized against immigrants and The Other.)
For Spain at least, most banks have foreigner accounts you can open with a passport, and convert into a normal account once you have local id later. It's a mildly unusual setup (and a bit confusing when you're new) but it's pretty widely available and it's not a significant blocker. There's plenty of other challenges and structural disadvantages as an immigrant, but this one at least isn't too bad.
If anything, there's really a big advantage to it for the banks - most locals already have banking, immigrants are the one market where you can get new customers without having to push them past the effort/laziness of switching from their existing setup.