One-time passcodes have long been a core security layer in banking. But attackers are now exploiting weaknesses in SMS-based OTP systems to bypass authentication.
A report by Recorded Future shows fraudsters intercept OTPs during broader campaigns.
Instead of breaking systems, they manipulate users in real time.
Social engineering is central to this shift.
Attackers impersonate banks and trick users into sharing codes, turning security measures into entry points.
Fraud operations are becoming more structured and scalable.
OTP-based systems are easy targets, especially for smaller organizations with limited defenses.
New attack methods like session hijacking are rising fast.
Real-time payment systems further reduce the window to detect and stop fraud.
Regulators are responding…..Countries like India, Singapore, and the UAE are moving away from SMS OTP toward stronger authentication methods.
The future lies in layered security.
Biometrics, device-based checks, and behaviour signals offer better protection than OTP alone.
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