Daijiworld Media Network - Dubai

Dubai, Sep 2: The Central Bank of the UAE (CBUAE) has issued a landmark directive that will permanently phase out SMS and email-based one-time passwords (OTPs) by March 31, 2026. The move comes amid rising digital fraud and a global shift toward safer, passwordless authentication methods.

Starting July 25, 2025, UAE residents will begin seeing new ways to verify banking transactions — from fingerprint scans to facial recognition and cryptographic passkeys tied to their devices. By the March 2026 deadline, traditional OTPs will be completely retired from the financial system.

The change follows a dramatic 73% spike in digital banking fraud earlier this year, exposing how outdated and vulnerable OTPs have become. Phishing scams, SIM-swapping, and social engineering have made it easy for attackers to intercept or manipulate OTP codes.

The solution? A shift toward advanced, secure, and user-friendly technology. Banks across the UAE will adopt global FIDO-standard passkeys, biometrics, UAE Pass integration, and even emerging safeguards like behavioural biometrics and AI-based fraud detection.

For customers, this means no more waiting for delayed or expired OTP messages. Instead, your device — secured by your fingerprint or face — becomes your key to accessing financial services. The process is faster, more secure, and immune to phishing attacks.

While the transition poses a major technological challenge for banks, it also promises long-term savings by cutting SMS costs and reducing call-centre load. Crucially, it’s expected to boost public trust in digital banking and position the UAE as a regional leader in fintech innovation.

This initiative mirrors global trends. Banks in the U.S. and Europe that adopted passwordless systems have already seen sharp drops in fraud and improved customer satisfaction. Now, the UAE is setting the pace in the Middle East, with a firm two-year timeline to bring every licensed financial institution on board.

Public awareness will be key. As many customers still rely on OTPs, banks are expected to launch education campaigns explaining how biometric data remains private and never leaves the user’s device.

In short, the next time you access your bank account in the UAE, your face, fingerprint, or phone itself — not a six-digit code — will be your new password.