BSP orders banks to go beyond OTPs
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has ordered banks to supplement one-time pins (OTPs) with more secure authentication methods to curb cybercrimes like scams and fraud.
While the ultimate goal is still to eventually shift away from OTPs, Deputy Governor Elmore Capule said the BSP was cognizant of the fact that such an undertaking can be very expensive for financial institutions.
Thus, Capule explained that the central bank wants regulated entities to limit the use of interceptable authentication mechanisms like OTPs, while adopting more safety measures for consumers.
READ: BSP eyes shift away from OTPs to fight fraud
“Because we have to realize that all of these things are very, very expensive. That’s the reality. So, we are giving them (financial institutions) sufficient time,” he told reporters in a press chat.
“But, at the same time, we realize that if they will not adapt to this, then we cannot really solve these scamming, these frauds. So, it’s a calibrated approach,” he added.
BSP Circular No. 1213 ordered banks to limit the use of authentication mechanisms that can be shared with, or intercepted by, third parties unrelated to the transaction. The central bank said there was an increasing prevalence of social engineering attacks aimed at obtaining the login credentials of victims.
READ: ‘Digital hygiene’ cuts probability of being scammed
Additional methods
The BSP said regulated entities, especially those engaged in “complex” digital products and services, must go beyond OTPs and adopt additional methods like biometric authentication, behavioral biometrics and password-less authentication such as hardware tokens and cryptographic keys.
As it is, the Philippines wants to follow the examples of other countries that have abandoned OTPs.
Last year, major retail banks in Singapore phased out OTPs to better protect consumers against phishing. This, as technological developments and more sophisticated social engineering tactics have enabled scammers to more easily phish for customers’ OTP.
The plan to eventually ditch OTPs is part of the BSP’s active effort to fight fraud via the Anti-Financial Account Scamming Act.
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The law not only prohibits and punishes financial cybercrimes but also compels regulated entities to employ adequate risk and fraud management systems.
