To apply for a credit card in Australia, you need to supply at least two forms of ID, such as an Australian driver's license, passport, or Medicare card.
Do the banks actually check that the documents are legit? I'm sure your favorite LLM can generate pictures of all these documents in the blink of an eye.
Because they usually don't, and they certainly don't in Australia where it's essentially impossible. The government run IDMatch DVS can verify that the biographic information is correct, but can not verify the authenticity of the document.
This kind of fraud is not special in Australia, it happens thousands of times every single day. There is currently no way to prevent it.
The last time I applied for a credit card (about 4 years ago) in Australia, the bank used an app that read the photo page and chip of my passport to verify that it was a real document. That process does verify the authenticity of the document.
There are IDs in Australia which can be verified this way. There are also more than enough accepted IDs that can not, rendering such verification mechanisms rather pointless.
On another note, it's important to keep in mind that this is really the bank's problem. It's not something consumers should worry about.