We don’t. We show banks picture ID to prove that we are who we say we are. That picture ID is usually our passport or driver’s license, neither of which is managed by the bank.

I guess it was a system already in place. There’s been suggestions to have different system where I live but mostly the current system seems fine to most so it hasn’t been changed. Some form of EU wide digital ID app or something might be nice. Or it could be an annoying pain, you never know how those turn out.