Users of digital banking services are set to receive stronger protection against fraud and unauthorized account access as Bangko Sentral ng Pilipinas (BSP)-supervised financial institutions complete the shift to more secure authentication systems.

Under BSP Circular No. 1213, issued in May 2025, covered banks and e-wallet operators were required to replace SMS- and email-based one-time passwords (OTPs) with stronger authentication technologies beginning 25 June.

These include biometric, behavioral, adaptive, and passwordless authentication methods designed to better secure high-risk digital transactions.

The circular applies to banks and e-wallet providers processing an average of more than P75 million in online transactions each month, covering most universal and commercial banks, all digital banks, and selected cooperative, thrift, and rural banks. Many institutions had already implemented the enhanced security measures ahead of the deadline.

“The BSP is equally dedicated to promoting innovation in financial services as it is to protecting customers from new forms of fraud, including technology-enabled fraud. We are pleased that banks and e-wallet operators are stepping up on both fronts,” BSP Deputy Governor Lyn I. Javier said.

The BSP said stronger authentication will be required for transactions considered high risk, such as digital banking enrollment, third-party fund transfers, online remittances, card payments, and changes to account credentials or registered devices.

Lower-risk activities, including balance inquiries and payments to pre-registered recipients, may still use less stringent verification methods, such as SMS OTPs.

Covered institutions are also required to strengthen fraud monitoring systems capable of detecting suspicious transactions, including unusually rapid transfers, transactions involving new recipients, and access from unrecognized devices.

The BSP said the measures form part of its broader effort to promote a safe, secure, and resilient digital payments ecosystem while supporting the continued growth of digital financial services.