The Bangko Sentral ng Pilipinas (BSP) has directed major financial institutions in the Philippines to replace SMS based OTP verification with stronger authentication technologies.

This mandate requires covered banks and digital wallet operators to transition to biometric, behavioural, adaptive, or passwordless solutions by 25 June 2026, according to an official press release.

The directive applies to entities averaging more than PHP 75 million in monthly online transactions.

This regulatory threshold covers most universal, commercial, and digital banks, alongside select rural and cooperative institutions.

Regulators require these stronger security measures specifically for high risk transfers.

Institutions will evaluate risk based on transaction values, payee profiles, and customer behaviour patterns.

Financial platforms can continue using text codes for transactions deemed low risk.

“The BSP is equally dedicated to promoting innovation in financial services as to protecting customers from new forms of fraud,” said Lyn I. Javier, Deputy Governor, BSP.

Javier added that the central bank is pleased to see banks and digital wallet operators stepping up to secure customer accounts.

The framework under Circular 1213 also compels financial firms to upgrade their internal fraud management systems to detect unauthorised access.

These systems must be capable of flagging unusually rapid transfers and transactions involving unrecognised devices.

The central bank stated that non covered institutions must still regularly assess their product risks to deploy appropriate fraud prevention tools.

Featured image: Edited by Fintech News Philippines based on an image by smth.design via Magnific.