FINANCIAL institutions must move beyond passwords and one-time passwords (OTPs) as digital fraud becomes increasingly sophisticated, said digital identity firm VIDA.
VIDA founder and chief executive officer Niki Luhur said traditional authentication methods are becoming more vulnerable as criminals shift their focus towards compromising users’ devices to gain access to banking accounts.
Speaking at the AIBP Conference and Exhibition Malaysia 2026, Niki highlighted how one of Malaysia’s digital banks has adopted passwordless authentication to strengthen protection against fraud while maintaining a seamless customer experience.
He said digital fraud has evolved into a global criminal ecosystem, where a single compromised device can trigger a chain of attacks — from malware hijacking banking sessions to stolen funds being transferred through mule accounts before being moved offshore.
“Authentication should not be treated as a one-time event. We need continuous authentication throughout the session to prevent advanced attacks such as session hijacking,” Niki said during his keynote address.
He said fraudsters can now intercept OTPs, hijack authenticated sessions and impersonate legitimate users once they gain access to a compromised device.
Unlike password and OTP-based systems, passwordless authentication verifies customers through trusted devices and biometric authentication, making it more difficult for criminals to take control of accounts, he said.
Niki also showcased a production implementation involving one of Malaysia’s leading digital banks, demonstrating how the technology can be integrated across the customer journey — including digital onboarding, account logins, high-risk transactions and account recovery.
“There doesn’t have to be a trade-off between security and user experience. With the right authentication architecture, financial institutions can deliver both,” he said.
VIDA, an Indonesia-based digital identity and fraud prevention company, said stronger authentication frameworks will become increasingly important as financial scams continue to evolve and target consumers through more sophisticated methods. - July 14, 2026
