For understanding this we first need to understand, what does OTP mean? Well, OTP in this context stands for “One Time Password”. OTP is a unique alpha-numeric 6-digit code that is generated automatically for a particular transaction or session. Once an OTP is used it cannot be used again so it provides a better security.
Now, talking about what does OTP mean in banking? In banking OTP is generally used while making an online transaction or while logging in your account. When making an online transaction after entering your card details and pin, another window pops out which asks for an OTP which is send to your registered mobile number. Once you enter to the OTP the transaction is then completed. If you have changed your mobile number that you have registered in the bank then you can change the mobile number for getting the OTP by taking the question challenge or by calling the BDO Customer Centre and asking them to update your new contact number. Once the number is updated you will get the OTP on your next login to your updated number. Then after entering the OTP you can continue with your transactions.
Also Read : What does OTP mean on Facebook?
Achieving Security and Benefits of OTP in Banking
Since we have covered what does OTP mean in banking. Now let’s talk about the benefits of OTP. Think if someone has your user ID and password how easy it is for him/her to access your account if we are using the static (traditional) password that is created by the user. But in case of OTP even after having your ID and password the login is incomplete because the OTP will be send to your registered mobile number. Now talking about achieving security. A number of ways also integrate two factor authentication that is along with authenticated login the OTP is added to provide a double layer security. So that if any one of them is incorrect then the login would be incomplete.
Advantages of OTP in Banking
- The OTP’s that are generated expires in a given time period depending on the tokens configuration. If the token is used after that time period then it won’t work.
- The OTP’s that are generated are different for every login. Once an OTP is used it cannot be reused.
- The static password that are created by us are not vulnerable to the attacks but the OTP’s are. If someone gets their hand on the old OTP it won’t be of any use to them.
- Moreover, anyone who uses similar password for different systems can be easily attacked if anyone gets hand on their password. But with OTP even after getting his/her password it won’t be possible to open the account.
The OTP’s are generated using mathematic algorithms which uses the concept of random numbers or randomness that is the number that is generated is not in a fixed pattern so it becomes difficult for the attacker to think for the next OTP by seeing the previous one. Even hash functions are used to derive the value of OTP as they it is difficult to reverse them so it becomes hard to find the value that was used for that hash.