The United Arab Emirates banking sector is undergoing a transformative security modernization, decisively moving away from traditional one-time passwords (OTPs) delivered via SMS or email. This strategic shift, mandated with a deadline of March 31, 2026, sees financial institutions replacing outdated methods with integrated in-app transaction authorization systems designed to be both faster and significantly more secure.
The initiative is a direct response to a global surge in sophisticated fraud, particularly social engineering scams proliferating on social media platforms that have also victimized UAE residents. Banking executives and regulators identified the inherent vulnerabilities of SMS-based OTPs—such as interception and phishing—as a critical weakness. The new protocol mandates ‘hard authentication’ directly within a bank’s secured application, effectively creating a more robust barrier against unauthorized access.
Raheel Ahmed, Group CEO of RAKBank, championed the decision as a necessary and correct move for the industry. He emphasized that the transition is not merely a technical upgrade but a fundamental enhancement of customer security. RAKBank itself has already successfully expanded its in-app authentication system to over 180,000 customers, reporting an impressive 80% authorization rate and a smooth, friction-free adoption process supported by educational videos.
This cybersecurity enhancement is perfectly timed with the nation’s explosive growth in digital and e-commerce transactions, which are estimated to have surpassed a monumental $60 billion in 2025. Data from the Central Bank of the UAE further underscores this digital boom, showing a 22.57% increase in retail transactions under the UAE Funds Transfer System (UAEFTS) in 2024, with a total value of Dh7.4 trillion.
Beyond immediate security benefits, this initiative is a powerful catalyst for the UAE’s broader vision of a cashless economy, driving greater digital banking app engagement. Acknowledging the digital divide, banks are implementing thoughtful support systems, particularly for elderly customers, to ensure technological literacy does not become a barrier to access. This comprehensive approach ensures the nation’s financial ecosystem remains both inclusive and at the forefront of cybersecurity innovation.