What are the business benefits of passkeys in finance?

Financial institutions are rapidly adopting passkeys to replace traditional authentication methods like passwords and SMS OTPs. Passkeys provide both security and business advantages, making them a compelling choice for the banking and finance sector.

1. Enhanced Security & Fraud Reduction
   Passkeys eliminate phishing, credential stuffing, and SIM-swapping attacks by using public-private key cryptography. This ensures that only legitimate users can authenticate, reducing fraud-related costs.

2. Improved Customer Experience & Higher Retention

• No need to remember complex passwords or wait for OTPs.
• Seamless authentication with biometrics or device-based authentication.
• Faster logins result in higher user engagement and retention.

3. Regulatory Compliance & Risk Mitigation
   Passkeys align with stringent compliance requirements such as PSD2, SCA, and MAS regulations. By adopting passkeys, banks can proactively meet evolving security standards while reducing legal and reputational risks.

4. Reduced Operational Costs

• Eliminates SMS OTP costs, which can save millions per year for large-scale banking platforms.
• Decreases customer support inquiries related to password resets and OTP delivery issues.
• Streamlines onboarding and account recovery, cutting IT and support expenses.

5. Scalability & Future-Proof Authentication
   Passkeys are built on FIDO2/WebAuthn standards, ensuring long-term scalability. They support multi-device authentication, making them ideal for financial institutions aiming to future-proof their authentication strategy.

Singapore’s financial institutions, under guidance from the Monetary Authority of Singapore (MAS), are already moving away from SMS OTPs due to security concerns. Passkeys provide a next-generation authentication approach that meets both security demands and business goals.

Banks that adopt passkeys early gain a competitive edge by offering superior security, lower costs, and frictionless user experiences. Institutions that delay implementation risk falling behind as more financial service providers prioritize passkeys as a modern authentication standard.