UAE Residents to Ditch Passwords for Safer, Faster Banking by 2026

The United Arab Emirates Central Bank has ordered financial institutions to abandon SMS and email one-time passwords by March 2026, a move that will quietly force every resident to adopt password-free log-ins—and could shut the door on the most common form of digital fraud.

Why This Matters

• 88% of web breaches start with stolen credentials – the weakest link is still the humble password.

• AED 30M – average regional breach cost, equivalent to the annual IT budget of a mid-size Emirati bank.

• 11 million people already use UAE Pass; the Central Bank deadline means many more services will switch it on by default.

• Help-desk calls could drop by half once passwords disappear, cutting wait times for residents and costs for employers.

The Hidden Price Tag of Passwords

Passwords were designed for a 1960s mainframe with a handful of users. In 2026, that relic carries a steep operational bill. Global breach research shows the average incident now costs $4.88 M, and the Middle East routinely lands above that figure. Analysts trace half of all help-desk tickets to forgotten credentials, each reset running about $70 in labour. Add regulatory fines—up to €10 M under Europe’s NIS2—and a weak password can feel more expensive than a luxury flat in Downtown Dubai.

Attackers love the economics. A bundle of freshly stolen logins sells for barely $10 on criminal markets. That bargain lets them “log in” instead of “hack in,” extending dwell time and inflating damage. One 2025 mega-dump exposed 16 billion passwords, fuelling credential-stuffing campaigns that target streaming services as eagerly as core banking apps.

Why Passwordless Is Finally Viable

Two trends flipped the script. First, FIDO2 and WebAuthn passkeys matured; by February 2026 the FIDO Alliance counted 4 billion passkeys in circulation. Success rates hover at 93%, and sign-in time drops by 73%, both user experience wins. Second, identity platforms—Okta, Azure AD, UAE Pass—embedded hardware-backed cryptography so the private key never leaves the chip, eliminating the shared secret that criminals phish for.

Organisations making the leap report a 32% fall in reset tickets and a 99.9% cut in account-takeover events. That translates into real dirhams: a large Dubai-based retailer told analysts it saved AED 12 M in 12 months after replacing passwords for 9,000 staff.

UAE Pass: From Convenience App to National Security Asset

When UAE Pass launched in 2018, it was marketed as a digital wallet for no-queue government services. Fast-forward: the platform has logged 600 million secure sessions, integrated 15,000 public- and private-sector services, and earned a Gold Award for security innovation. The Central Bank’s 2025 directive elevated it from handy app to critical authentication backbone.

Behind the sleek facial-recognition onboarding sits blockchain-anchored audit trails and optional FIDO2 passkeys. Banks began soft-launching passkey log-ins last July; telecoms and insurance portals are next. Developers cite the government-maintained SDK as a reason integrations now take “days, not months.”

What This Means for Residents

• Fewer hoops at checkout: Expect major e-commerce sites to swap password boxes for a “Sign in with UAE Pass” button. One tap, face ID, done.

• Lower fraud risk: Phishing emails that once demanded urgent password resets will largely fail because there is no password to steal.

• Snappier banking: App-based push or biometric approval replaces waiting for an SMS that never arrives when you’re abroad.

• Job market edge: Employers value staff who understand modern security basics. Familiarity with passkeys could become a CV bullet point like Excel once was.

Challenges Ahead for Businesses

Going passwordless is not a flip of a switch. Legacy ERP systems, VPNs and IoT devices still expect a text string. The pragmatic path is to let automation create long, random “buried” passwords that users never see while layering phishing-resistant MFA on top. Firms must also revise incident-response playbooks: credential resets morph into key-revocation workflows.

Compliance teams worry about liability for biometric data, yet regulators already hint that not adopting stronger authentication may be the bigger risk. NIS2 and the UAE’s own Central Bank standards hold senior management personally accountable for lax controls.

The Bottom Line for Investors

The global passwordless market is projected to hit $20 B by 2033, quadrupling from 2025. In the Gulf, venture funding is gravitating toward startups that plug passwordless gaps—think device attestation for industrial sites or passkey orchestration for multi-cloud estates. Enterprises that delay could face higher cyber-insurance premiums and customer churn once passkeys become the regional norm.

For residents, the shift promises smoother log-ins and smaller fraud headlines. For companies, it is rapidly moving from nice-to-have fintech feature to board-level mandate. One thing is clear: in the UAE’s vision of a digital economy, the forgotten password is destined to become just that—forgotten.