Passwords create security risks, poor user experiences and high support costs, making them unsuitable for modern digital banking. Passkeys, based on FIDO standards, offer phishing resistant, cryptographic authentication using biometrics and device bound keys. Financial institutions can adopt synced passkeys for basic login and device bound passkeys for strong customer authentication to meet strict regulatory requirements such as PSD2. Passkeys improve security, reduce fraud exposure, lower reset costs and create a smoother digital experience, making them the logical replacement for password and OTP based systems.

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