---
url: 'https://www.corbado.com/faq/why-banks-should-collect-passkeys-early'
title: 'Why should banks start collecting passkeys early?'
description: 'Early passkey adoption helps banks improve security, reduce fraud, and future-proof authentication while staying ahead of regulations.'
lang: 'en'
---

# Why should banks start collecting passkeys early?

## Why Should Banks Start Collecting Passkeys Early?

As financial institutions move away from outdated authentication methods like **passwords
and SMS OTPs**, **passkeys** are emerging as the **future-proof** solution for secure and
seamless [banking](https://www.corbado.com/passkeys-for-banking) authentication. **Banks that start collecting
passkeys early will gain a strategic advantage** by improving security, reducing costs,
and ensuring [regulatory compliance](https://www.corbado.com/blog/cybersecurity-frameworks).

## Key Reasons Why Banks Should Adopt Passkeys Early

1. **Future-Proof Authentication & Regulatory Readiness**

- [Governments](https://www.corbado.com/passkeys-for-public-sector) and financial regulators worldwide are
  tightening **security requirements** (e.g., [PSD2](https://www.corbado.com/blog/psd2-passkeys), SCA, MAS
  guidelines).
- Passkeys meet **phishing-resistant authentication** standards, ensuring banks stay
  **ahead of compliance mandates**.

2. **Enhanced Security & Fraud Prevention**

- Passkeys **eliminate phishing attacks** by ensuring authentication only occurs on
  legitimate [banking](https://www.corbado.com/passkeys-for-banking) platforms.
- They remove reliance on **SMS OTPs**, which are vulnerable to **SIM-swapping,
  interception, and social engineering attacks**.
- Public-private key cryptography ensures **only trusted devices** can authenticate user
  sessions.

3. **Cost Savings & Reduced Support Overhead**

- **Eliminates SMS OTP costs**, which can save banks millions annually.
- **Reduces customer support workload** by minimizing
  [password resets](https://www.corbado.com/faq/passkeys-reduce-password-resets-otp-costs) and OTP delivery
  issues.
- Streamlines onboarding, **improving conversion rates** and reducing drop-offs.

4. **Competitive Advantage & Customer Experience**

- **Faster, frictionless logins** enhance customer satisfaction and reduce
  [login friction](https://www.corbado.com/blog/login-friction-kills-conversion).
- [Biometric authentication](https://www.corbado.com/blog/passkeys-biometric-authentication) improves **user
  trust and convenience**, leading to higher adoption and retention rates.
- Banks that **implement passkeys early** will be seen as **innovation leaders** in secure
  digital [banking](https://www.corbado.com/passkeys-for-banking).

5. **Seamless Transition to Passwordless Authentication**

- By starting early, banks can **gradually transition users** from passwords to passkeys,
  minimizing disruption.
- Hybrid authentication models (e.g., **passkeys alongside existing methods**) ensure
  smooth adoption.
- Early passkey collection helps **prepare customers and internal systems** for a complete
  **passwordless future**.

## The Time to Act is Now

Singapore’s **Monetary Authority of Singapore (MAS)** has already mandated the phase-out
of SMS OTPs due to security [vulnerabilities](https://www.corbado.com/glossary/vulnerability). **Passkeys are the
next logical step**, providing the highest level of security, cost efficiency, and user
convenience.

Banks that **start collecting passkeys today** will be in the best position to
**seamlessly transition to passwordless authentication** while improving **security,
compliance, and user trust**.

## Read the full article