BSP mulls liability shifts as banks move beyond OTPs

The Bangko Sentral ng Pilipinas (BSP) is preparing to shift liability onto banks that rely on outdated one-time passwords (OTPs) for digital authentication as more robust biometric verification systems gain traction in the financial sector.

- By KEISHA TA-ASAN

In an interview with The STAR, BSP Deputy Governor Mamerto Tangonan said that following the enactment of the Anti-Financial Account Scamming Act (AFASA), financial institutions have started to explore and adopt stronger authentication methods beyond OTPs.

He said some banks are now leveraging the Philippine Statistics Authority (PSA)'s national ID verification service, requiring facial recognition both at account onboarding and for certain high-risk transactions.

Tangonan said this transition to biometric authentication not only strengthens consumer protection but may also influence how accountability is assigned in fraud cases.

"Later on, we will look into shifting liability to banks that continue to use weak authentication mechanisms," Tongonan said, adding that "when authentication is weak, and the customer challenges a transaction, we may hold the bank liable."