Importance of OTP in Banking Sector

OTP in banking sector

One Time Password (or SMS OTP) is two-factor authentication (2FA) that helps provide additional security safeguards to the users by randomly generating single-use passwords sent to a user’s phone. Users need to enter these additional passwords within a certain amount of time to access their online banking account. The purpose of an OTP integration is to prevent fraudulent activities by confirming that the person who makes the transaction and the owner of the credit card are the same. To do so, a temporary code is automatically sent by SMS to the phone number associated with the bank account used. This makes OTP’s a pretty secure system to recover accounts or add an extra layer of security to them.

One Time Password, the added security layer over and above your static password, is what today’s robust authentication systems address and topple the limitations of static passwords by incorporating an additional security credential. The OTP aids to protect network access and end-users digital identities. It is a six-digit numerical code sent in real-time as SMS to your registered mobile number while performing the transaction. It is a faster, easier and convenient checkout option for online purchases. No need to go through a lengthy card registration/ password reset process. Once you request an OTP, you can use OTP integration through different channels.

  • OTP via SMS
  • OTP via Voice
  • OTP via Email
  • OTP via WhatsApp

Two-factor authentication helps offer security by making it harder for attackers to access a person’s devices or online accounts. Even if the victim’s password is hacked, a password alone is not enough to pass the authentication check. If you receive an OTP without initiating any transaction online, please call Phone Banking immediately to disable your dB OnlineBanking access till the matter is investigated and resolved.

OTP is Mandatory for Authorising the Following Transactions:

  • Registration of beneficiary bank accounts of other banks
  • Bill payments
  • db DirectDebit (e-commerce)
  • db QuickPay
  • NEFT/RTGS (for transaction value INR 10,000 and above)
  • Funds transfer to other Deutsche Bank Accounts
  • Mobile / e-mail ID change
  • Alert profile change
  • Demand draft issuance

Why Do You Use OTP in Banking?

The purpose of an OTP integration is to prevent fraud by confirming that the person making the transaction and the credit card owner are the same. The OTP is delivered to the user via SMS, Email or phone call. The user then enters the OTP credential as the response to proceed with the operation. Protecting customer accounts is the top-most priority for financial institutions everywhere. Therefore, in today’s time, many financial institutions are turning digital and using OTP integration to boost the security of customers.   

How does OTP work in banking?

While making an online purchase, users must enter a dynamic PIN or OTP that is generated to complete the transaction. If the information does not match, the signature is voided, and the transaction will not be approved. Next, the bank server generates the OTP SMS and is handed over to the client’s mobile subscriber. After the encrypted OTP SMS reaches the client’s mobile, the OTP is again used for decrypting. Finally, the plain OTP text should be sent back to the bank and verified at the server to complete the transaction initiated.

mTalkz is an OPT SMS service provider known to offer the best services that help businesses grow and survive in the long run. Being a verified OTP authenticator, its services are trusted by lots of people. Visit the mTalkz website for more information!

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