---
url: 'https://www.corbado.com/faq/why-digital-tokens-more-secure-sms-otps'
title: 'Why are digital tokens more secure than SMS OTPs?'
description: 'Digital tokens provide stronger authentication than SMS OTPs by being device-bound and resistant to phishing attacks.'
lang: 'en'
keywords: 'digital tokens security'
---

# Why are digital tokens more secure than SMS OTPs?

## Why Are Digital Tokens More Secure Than SMS OTPs?

One-time passwords (OTPs) sent via SMS have long been used for online
[banking](https://www.corbado.com/passkeys-for-banking) authentication, but they come with significant security
risks. **Digital tokens** are now replacing SMS OTPs in financial institutions, offering
**stronger authentication and better phishing resistance**.

### Key Security Advantages of Digital Tokens

1. **Device Binding**\
   Digital tokens are tied to a specific mobile device, ensuring that only the authorized
   user can generate authentication codes. This makes it impossible for attackers to steal
   or intercept an OTP and use it on another device.

2. **Phishing Resistance**\
   SMS OTPs can be intercepted via **SIM-swapping attacks** or tricked out of users
   through fake [banking](https://www.corbado.com/passkeys-for-banking) websites. Digital tokens, however,
   operate within **trusted banking apps** and do not rely on manually entered codes,
   making them significantly harder to phish.

3. **End-to-End Encryption & Cryptographic Authentication**\
   Digital tokens use **public-private key cryptography**. When a user attempts to
   authenticate, the [banking](https://www.corbado.com/passkeys-for-banking) server sends a challenge, which is
   signed using a **securely stored private key** on the device. The signed response is
   verified using a public key, ensuring only the legitimate device can authenticate.

4. **Elimination of SMS-based Attack Vectors**\
   SMS OTPs rely on mobile networks, which can be **hijacked, delayed, or intercepted**.
   Digital tokens work **independently of network providers**, eliminating risks from
   carrier-based attacks.

5. **Push-Based Authentication Instead of Manual Code Entry**\
   Many digital tokens use **push notifications** instead of displaying a code. The user
   simply **approves a login request** in their bank’s app, further reducing the risk of
   [phishing](https://www.corbado.com/glossary/phishing) attacks.

### Are Digital Tokens Completely Phishing-Proof?

While digital tokens significantly improve security, they are **not completely immune to
phishing**. Attackers may attempt to trick users into approving fraudulent transactions
(also known as **MFA fatigue attacks**). This is where **passkeys** provide an even
stronger alternative, as they prevent authentication on fraudulent websites altogether.

### The Future of Secure Authentication

Singapore banks are leading the way in **phasing out SMS OTPs** in favor of digital
tokens. However, **passkeys** represent the next evolution in secure authentication,
offering true [phishing](https://www.corbado.com/glossary/phishing) resistance and a seamless user experience.

## Read the full article