Apple made the first beta of iOS 16.3 available in mid-December, and so far only two new features and changes have been discovered in the upcoming software update, including support for hardware security keys as a two-factor authentication option for Apple ID accounts and a new prompt for handing off music playback from an iPhone to a HomePod.
iOS 16.3 should be publicly released within the next few months, and it is possible that more features will be added in later beta versions. In the meantime, we have provided additional details about the two changes discovered so far below.
Security Keys for Apple IDs

The first iOS 16.3 beta enables a new Security Keys for Apple ID feature that Apple said will be available globally in early 2023. The feature gives users the option to use hardware security keys to further protect their account. For users who enable this feature, Security Keys strengthens Apple’s two-factor authentication by requiring a hardware security key as one of the two factors instead of a verification code from another Apple device.
Apple does not plan to release its own hardware security keys. The feature will rely on third-party security keys available from brands like Yubico, such as the YubiKey 5Ci, which has both Lightning and USB-C connectors for use with iPhones, iPads, and Macs.
HomePod Handoff Prompt

As noted by Max Weinbach on Twitter, the first iOS 16.3 beta adds a new prompt to transfer/hand off music from an iPhone to a HomePod. Only the prompt itself is new, as the HomePod audio handoff feature already existed.