Users of digital banking services are now better protected from fraud and unauthorized account access as Bangko Sentral ng Pilipinas (BSP)-supervised financial institutions (BSFIs) implement more secure authentication measures.
The BSP last year required covered BSFIs to replace SMS- and email-based one-time password (OTP) with stronger technology on or before June 25, 2026. These include biometric, behavioral, adaptive, or passwordless solutions under BSP Circular No. 1213, issued in May 2025.
The circular covers banks and e-wallet operators that average more than P75 million of online transactions per month. That includes most universal and commercial banks, all digital banks, and some cooperative, thrift, and rural banks. Many are already implementing the enhancements in the lead-up to the deadline.
“The BSP is equally dedicated to promoting innovation in financial services as 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,” said BSP Deputy Governor Lyn I. Javier.
These BSFIs are required to apply the stronger technology to transactions they consider high-risk.[5] Risk is assessed based on factors such as payee profile, value of the transaction, customer behavior patterns, and nature of the product or service. For transactions assessed as lower risk,[6] BSFIs may use less stringent authentication methods, such as OTPs sent via SMS.
Non-covered institutions are not required to shift to stronger verification tools within the same transition period but must regularly assess the risks associated with their products and services to determine the appropriate measures for fraud prevention.
The circular likewise requires covered BSFIs to strengthen their fraud management systems to better detect and prevent unauthorized transactions. These systems must be capable of flagging unusual or suspicious activities, including unusually rapid transactions and those involving new recipients or unrecognized devices.
The BSP is committed to promoting a safe, secure, and resilient digital payments ecosystem while supporting the continued growth of digital financial services.
