Any sort of fintech (including crypto exchanges) is going to require photo ID scans (and possibly even some sort of live selfie stream, to make sure the scan isn't from some leak) for KYC reasons.
Actual banks (not fintech barnacles) enjoy a very privileged position in terms of verifying identity and legal mechanisms afforded to them.
If a non-bank actor can verify against an actual bank, that should be enough…
It is absurd that, for instance, a small saas/iaas provider should perform any form of KYC when we can match a successful payment against a bank.