Earlier quoted context omitted.
How does a rooted phone enable bank fraud? This smells like pointless policy checkboxing.
If you run a rooted phone and download malware, that malware can gain root and do payments on your behalf. Then PayPal has to deal with you revoking payments etc., they don't want to so they forbid you from using PayPal on a rooted phone.
Also I highly doubt that there is any real statistics anywhere about whether this is a real threat or not. I guarantee that nobody did such statistics properly. The only known data is from companies which sell root prevention tools, so totally unreliable. And internally I guarantee, that no banks collect such info.
So no, banks lie about this only because they can sell this to judges as safety feature, when they fuck up, which happens continuously.