---
url: 'https://www.corbado.com/faq/business-benefits-of-passkeys-in-finance'
title: 'What are the business benefits of passkeys in finance?'
description: 'Passkeys enhance security, reduce fraud, improve user experience, and lower operational costs for financial institutions.'
lang: 'en'
---

# What are the business benefits of passkeys in finance?

## 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](https://www.corbado.com/passkeys-for-banking) and finance sector.

### Key Business Benefits of Passkeys for Financial Institutions

1. **Enhanced Security & Fraud Reduction**\
   Passkeys eliminate [phishing](https://www.corbado.com/glossary/phishing),
   [credential stuffing](https://www.corbado.com/glossary/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](https://www.corbado.com/blog/introducing-passkeys-large-scale-overview/why-are-sms-otps-costly-for-enterprises),
  which can **save millions per year** for
  [large-scale](https://www.corbado.com/blog/introducing-passkeys-large-scale-overview)
  [banking](https://www.corbado.com/passkeys-for-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](https://www.corbado.com/faq/are-passkeys-the-future) their
   authentication strategy.

### Why Are Banks Transitioning to Passkeys?

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**.

### The Competitive Advantage

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**.

## Read the full article