Why do passkeys reduce account takeover risk more effectively than OTP?

Why This Matters for Security Teams

Passkeys change the takeover equation because they remove the shared secret that attackers usually target. OTP is still vulnerable to phishing, real-time relay, SIM swap abuse, push fatigue, and support-channel manipulation. Passkeys bind authentication to a device-held private key and a specific relying party, which makes replay far harder. For security teams, that shifts the problem from code protection to device assurance and recovery design.

This matters because account takeover often starts with a single credential capture and ends with privilege escalation across email, SSO, SaaS, and admin consoles. NIST’s NIST Cybersecurity Framework 2.0 emphasizes stronger identity and access outcomes, but practitioners still need to map those outcomes to the actual auth mechanism in use. NHI Management Group research shows that secrets-related exposure remains widespread, with 90% of IT leaders saying proper NHI management is essential for successful zero-trust implementation.

In practice, many security teams encounter takeover paths only after a phished OTP or intercepted reset has already been used, rather than through intentional authentication testing.

How It Works in Practice

OTP works as a short-lived shared secret. That is better than a password alone, but it still travels through a channel that can be observed, relayed, or socially engineered. Passkeys use public-key cryptography instead: the private key stays on the user device, while the authenticator signs a challenge for the exact site or app being accessed. The relying party verifies the signature without ever learning a reusable secret.

That design reduces the attack surface in several ways. First, there is no code for a phisher to steal and reuse. Second, origin binding makes it much harder to replay a passkey response against a lookalike domain. Third, because the private key is not shared with the service, bulk credential theft is less useful. This aligns with the direction implied by NIST SP 800-53 Rev. 5 Security and Privacy Controls, which expects stronger authentication and access control than one-time codes alone.

• Use passkeys for workforce and high-risk consumer journeys where phishing resistance matters most.
• Keep OTP only as a fallback, not the primary control, and protect the fallback path with stronger recovery checks.
• Pair passkeys with session controls, device binding, and step-up authentication for sensitive actions.
• Review enrollment and recovery flows carefully, since attackers often target the weakest secondary channel instead of the login prompt.

NHI Management Group’s Top 10 NHI Issues research reinforces the broader point that identity controls fail most often at lifecycle edges, especially where secrets, recovery, and revocation are handled inconsistently. These controls tend to break down when organisations still depend on SMS or help-desk recovery for privileged users because the attacker simply targets the backup path.

Common Variations and Edge Cases

Tighter authentication often increases rollout complexity, requiring organisations to balance phishing resistance against device support, accessibility, and recovery overhead. That tradeoff is real, especially in mixed fleets and customer-facing environments where not every user can enroll a hardware-backed authenticator immediately.

There is no universal standard for recovery yet, so guidance is evolving. Best practice is to treat recovery as a high-risk workflow, not as an administrative convenience. If a passkey can be re-enrolled through weak email verification, the security gain is partially lost. In regulated or high-value environments, teams should also consider phishing-resistant step-up for admin actions and use passkeys alongside broader identity controls rather than as a standalone fix.

For consumer applications, OTP may remain acceptable as a transition method, but current guidance suggests phasing it down for primary sign-in where account takeover impact is material. For enterprise use, the strongest pattern is to combine passkeys with conditional access, device posture checks, and restricted recovery roles. NHI Management Group’s Ultimate Guide to NHIs is a useful reminder that identity security failures usually emerge when control gaps accumulate across the full lifecycle, not at authentication alone.

Related resources from NHI Mgmt Group

• Why do FIDO2 and passkeys reduce phishing risk more effectively than OTP codes?
• How should teams reduce the risk from overprivileged NHIs?
• How should organisations reduce MFA-related account takeover risk?
• How can organisations reduce account takeover risk without hurting user experience?