The United Arab Emirates (UAE) has decided to remove the UAE Banks OTP Authentication for online transactions. Now, banks are moving towards application-based authentication systems. However, the step comes under the directive of the Central Bank of the UAE (CBUAE) as a part of its ongoing efforts to empower cybersecurity in the financial services.
Several leading banks, which cover more than 90 percent of the customer base of the UAE, have already completed this transition. Moreover, according to a report by Emarat Al Youm, the remaining banks are expected to phase out the OTPs by the end of next year.
How the New System Works
Under the new framework, customers are going to confirm transactions directly through the mobile app of their banks. Instead of typing an SMS code, you will be asked to approve the transactions through swiping, scanning, or biometric confirmation.
OTPs will still be available for customers who prefer not to switch. However, in such cases, customers will need to submit a written request. Moreover, banks will also issue a disclaimer in such cases to clarify that they will not be responsible for fraud or unauthorized withdrawals linked to the use of OTP.
Expert Insights on Phasing out UAE Banks OTP Authentication
Banking expert Awatif Al Harmoody praises this transition. Moreover, she called it a very positive step aligned with the digital transformation across the economy. In addition, she highlighted that more than 90 percent of customers already prefer mobile banking apps, due to their speed, reliability, and improved security compared to traditional OTPs.
Al Harmoody highlighted that the adoption is expected to accelerate as the digital-first system becomes the norm. However, he acknowledged that a small number of customers might resist the change.
Why This Matters for UAE Customers?
The change is a part of the wider strategy of the Central Bank to achieve the following goals:
- Enhance cybersecurity in the financial sector.
- Improve customer convenience by removing SMS delays.
- Promote digital-first banking services in line with global best practices.
This transition shows the growing demand for secure, fast, and app-based financial services, as the UAE continues to lead in digital innovation. In short, the message for residents in the UAE is clear that the future of online banking in the country lies in mobile banking. However, the OTP authentications are going away to protect customers from cyberattacks.
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