UAE banks have stopped sending OTPs (one-time passwords) via SMS and email for digital transactions from July 25, 2025.
An OTP is a security method that verifies a user’s identity by utilising a one-time code or a temporary code sent through email, which they can use to complete a transaction. However, as cyber attacks become more prevalent, OTPs are no longer as secure, according to industry experts, who note that fraudsters are now using AI and machine learning to create more sophisticated scams, as reported by Khaleej Times. They can hack phone numbers by cloning SIM cards, receiving the OTPs necessary to make transactions and steal money from card owners.
Shifting from OTPs to biometric authentication
Banks and regulators in the region are adopting authentication technologies to secure transactions, protect clients’ identities, and offer a better user experience. The new feature can detect when an account is being accessed by someone other than the legitimate user, even if the correct credentials are provided. This aims to deliver an early warning against fraud.
UAE banks changed local and international financial transfers and online transactions verification methods. Rather than OTPs, they shifted to authentication via mobile banking apps, using in-app confirmation features.
Industry experts encourage the elimination of SMS-based OTPs as banks are incorporating behavioural biometrics into their mobile apps and online banking apps. Some individuals and corporate clients are adopting hardware authenticators to safeguard access to sensitive accounts. Some banks also offer security key support for VIP and executive accounts.
Switzerland-based Hashgraph Association supports the shift, believing that this move is a step forward in making the authentication approach more secure and digitalised for customers. The reduction of vulnerable OTP messaging and adoption of security-focused mobile app biometric authentication will aid further developments as banks adopt stablecoin payment solutions and launch their own digital asset wallets for secure, real-time transactions.
