There’s no world where the bank is on the hook for fraud while also not being allowed to prevent it.
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.
I have one of those 2FA code generators, and used to have a different one with a business account, too.
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.
There is such a world, and we live in it. Banks might reduce fraud by repeatedly performing credit checks on customers, for example, but that's usually illegal.
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.
Is this not a solved problem? I used to have a TAN generator for my bank as a separate device I paid like 5 euros for. If you get provided an authenticator and get forced to use it for transfers essentially even if my device is compromised it doesn't matter unless their device also gets compromised. They are then free to lock it as much as they want.