UAE Banks Moving to Phase Out OTPs
In line with the UAE Central Bank’s directives, major banks are transitioning to mobile app-based authentication for online transactions. By the end of 2025, one-time passwords (OTPs) will be completely phased out in favor of faster, safer alternatives.
Several major banks that serve over 90 percent of customers have already adopted this new system, ensuring more secure and efficient transactions. The remaining institutions are expected to complete the transition by next year.
The New Authentication Process
Under the new system, users will no longer rely on OTPs delivered via SMS. Instead, authentication will occur through the bank’s mobile app, typically by swiping or scanning, for faster confirmation of online transactions.
This shift is expected to streamline the transaction process, improving user experience while enhancing security. Customers who prefer to keep using OTPs can do so by submitting a written request, although banks will disclaim responsibility for any fraud or unauthorized transactions related to OTPs.
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Benefits for Customers and Banks
This change promises multiple benefits. First, it increases security by moving away from OTPs, which have been increasingly vulnerable over the years. Second, it provides faster transaction times, eliminating the wait for SMS codes.
Awatif Al Harmoody, a banking expert, praised this transition. “More than 90 percent of customers already prefer using mobile apps for banking,” she said. “The new system is more secure and reliable than OTPs.”
Customer Adoption and Digital Transformation
While some customers may initially resist the change, Al Harmoody believes that adoption will increase as the new system becomes the norm. The shift mirrors earlier digital transitions that gained momentum once the new technology became widely accepted.
Central Bank’s Role in Enhancing Cybersecurity
This transition is also part of the Central Bank’s broader strategy to improve cybersecurity across the UAE’s financial sector. By phasing out OTPs, the Central Bank aims to create a more robust and secure digital banking infrastructure.
As more institutions adopt mobile-based authentication, the UAE will continue to lead in digital banking innovation, enhancing security while streamlining financial transactions.
A Step Toward Secure and Digital-First Transactions
In conclusion, the shift from OTPs to mobile app-based authentication is a significant step in the UAE’s ongoing digital transformation. This change is part of a larger movement to modernize banking and improve cybersecurity.
By embracing these innovations, the UAE is setting a benchmark for secure, efficient, and future-ready financial services.
