I'm not really sure what the best fix is; there are many possible ones. I've seen total clowns pushing decades-old nonsense be taken seriously by competent businesses simply because they thought "hiring an expert" was enough, like they're a plumber or something.

The client can only use numerical passwords. When loading the login page, their site also loads the number pad, which consists in an HTML pad containing the 10 digits. The digits are displayed as base 64 images and in a random order, so it's impossible to determine which digit is which from parsing the HTML alone. In the HTML, the images of the digits are each associated to a random 3 letters string. This string will be sent to the server instead of the plain digit.

With the number pad, the site also load a "challenge", and this challenge is sent to the server when connecting. My guess is that this challenge is an encrypted string that indicates what digit corresponds to what 3 letters string.

I made a script that logs in to my bank account to get some information and I was able to do it without using OCR on the images of the number pad because the images never change, so their base 64 strings are always the same. I was a bit disappointed when I realized it, I thought that the people who came with such a twisted login form would have added random noise to the image, just for fun.

When I was a kid, a teacher told me learning was supposed to be hard and unpleasant, and I believed her for a long time. Only when I started enjoying myself in spite of that did I see it was wrong, and I started doing well in school, and (more importantly) pursuing my own interests.

There's a similar thing with security - people assume good security must be painful, so making it painful becomes a goal. Sometimes this is sincere, sometimes (TSA) intentional theater. But either way, the result is intentional hostility to the people who use the system.

I'd bet money they have a one-sentence answer for why it does each of those things ("order is scrambled to prevent shoulder-surfing"), but have done zero testing to determine whether those theories are correct.

I see this view a lot. It's wrong. TOTP is fundamentally different to a password, as the stored "password" (by which I presume you mean the key) is never transmitted anywhere.

TOTP in fact has one property that makes it potentially* the most secure of all 2FA methods: it can be used airgapped. As the credential you type into the 2FA form is not the saved secret.

* I say "potentially" because the relative inconvenience + human factors conspire to make it less secure than e.g. U2F in most cases. But assuming hypothetical perfect conditions, there would be nothing more secure than TOTP for 2FA.

After the security backlash they now backpedaled and implemented 2FA with ONLY apps. Apps that ONLY work on iOS and Google Android. I had endless calls from family where they couldn't access their banks anymore because they had a Huawei phone or a dumb phone. Banks are citing "security" as explanation why they can't use smartcards, hardware tokens or even bring apps to desktop computers or phones without Google services.

The funny part is - ALL banks did this at once. Why? Because the security consultants had "must have app" and "must check Google Safety net" on their check lists.

The hash seed that generates a password is connected to the device.

Would you not install two deadbolts on your door if you needed the extra security?