September 3, 2025 | Dubai, UAE: The Central Bank of the UAE (CBUAE) has declared that the UAE banks OTP phase out, as the head of a significant project aiming to improve the use of digital banking, will be introduced no later than March 2026. This transformation will eliminate SMS-based one-time passwords (OTPs) and bring in advanced, phishing-resistant authentication technologies such as passkeys and biometrics.

UAE Banks OTP Phase Out

One-time passwords (OTPs) were just about the most secure tool that could be used when online banking for a significant period of time. However, the rise of phishing, SIM-swapping, and social engineering has led to an increase in OTP system weaknesses being exposed. The UAE banks OTP phase out is aimed at solving these problems, regaining customer confidence, and positioning the UAE as the leader of secure and seamless financial services.

According to the new structure, banks will be mandated to introduce passkeys instead of traditional OTPs on a progressive basis. Passkeys are cryptographic keys that are saved in the user’s device and are therefore considered secure. Apart from that, passkeys will also be combined with fingerprint or face recognition, which has become a standard feature in most smartphones. So there won’t be any SMS codes sent to the users, rather, they will be able to access or authorize their transactions via a quick biometric verification.

Experts in the industry confirm that the initiative to UAE banks OTP phase out is not just a matter of meeting regulatory requirements but a strategic move. One of the benefits banks get from this transition is the lowered risk of fraud. Apart from that, the money that used to go to the delivery of SMS can now be saved. Furthermore, fewer OTPs will mean fewer calls to customer services. As for consumers, they will receive quicker, safer, and more hassle-free banking services.

OTP Replacement in UAE Banking Brings Security and Simplicity

This change is a crucial moment for the financial sector to switch to future-proof solutions. The UAE banks OTP phase out is not the only change that will enable banks; they will be allowed to use other cutting-edge tech such as Behavioural Biometrics, Decentralised Identity (DID) Systems and Risk-based Authentication to cover the whole customer journey from onboarding to high-value transactions.

The specialists point out that such transformation is in line with international best practices. The leading banks in the US and Europe have already undergone a similar process and have encountered not only the fraud attempts dropping significantly but the customer satisfaction increasing as well. The UAE banks OTP phase out will allow them to catch up and even be ahead of the game when it comes to creating a safe digital banking environment worldwide.

The passkeys come with a lot of advantages compared to the old OTPs. Moreover, the cryptographical bond of the key to the bank application or webpage makes it almost impossible for phishing. Hence, though the fraudsters may have one or more fake websites, the passkeys will not authenticate and so the attackers will be one step closer to being blocked. Customers will get the feeling of security while banks can achieve more seamless operations and enhance their security image in the UAE banks OTP phase out.

The OTP replacement in UAE banking has an additional feature that is customer convenience. For instance, no waiting for text messages that sometimes are not delivered because of network problems or getting codes that will have to be reset quickly because of expiration. Moreover, a biometric scan that might take a few seconds can solve other customers’ frustrations just as well when faced with multiple failed login attempts.

It is anticipated that banks will be organizing awareness campaigns for their customers, explaining and making the transition as easy as possible. As the time of the UAE banks OTP phase out next March 2026 is coming nearer, transparency, education, and gradual rollout will become crucial for gaining trust.

Financial managers perceive this transition as a turning point rather than an obstacle in front of them. Quoting a senior executive’s words, “This change is not just a step up in technology but a leap into the smarter, safer, and simpler banking realm.” In addition to that, the OTP replacement in UAE banking is going to lead the way of innovation and digital trust while those that lag behind will lose the trust of their customers.

The move to a world without passwords is no longer far. Millions of residents using UAE banks daily will just next time log in through their face, finger or device, without the need for an SMS code and hence it will be secure and seamless.

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