How Do Stock Trading Apps Protect Your Information?
Introduction
When it comes to trading money and giving account information, the first thought that comes to mind is the safety of the trading app. It is the most crucial aspect of any stock trading app, and before you choose the best one for you, make sure that it uses all safety precautions to protect your information.
To understand whether your trading platform is safe, knowing how their safety protocols work and what means a stock trading app takes to protect your information is important. Let us learn about a few data security aspects involved in trading apps.
Encryption Techniques
Stock market trading apps require you to use strict measures to ensure that your information is well protected. In doing so, these apps use encryption techniques to protect your information from cyber attacks, frauds and scams.
Such encryption techniques encode all your important information, such as date of birth, account details, card details (if applicable), passwords, etc., and prevent unauthorised parties from accessing it.
It also makes use of an encryption key, which is an algorithm that is required to access the information. This means that anyone without the encryption key cannot access your information.
Two-Factor Authentication (2FA)
Two-factor authentication, or 2FA, is commonly used by stock trading apps to provide an additional layer of security to your information. This technique uses methods to verify your identity twice using two different modes.
For example, you sign in to your account using your unique customer ID/username and password. This is the first-factor authentication. However, it was often easy to surpass and hack into your account.
To prevent this, after you sign in, you need to go through one more process to confirm your identity. This is usually done by verifying an OTP sent to your registered email or phone number.
Compliance and Regulations
Since the use of third-party trading apps has increased in India in recent years, the regulations and compliance rules surrounding them have become strict. The government of India does this to protect your information and ensure that a standard level of safety is maintained across such platforms.
Stock trading apps are required to comply with these rules and follow the set regulations. These include registering with the Securities and Exchange Board India (SEBI). This regulatory body implies rules to ensure that investors’ trading experience is transparent and easy.
Guidelines imposed by SEBI also ensure that investors conduct their trades in a disciplined way. For example, they set guidelines for pledging of shares, limits for intraday trading, etc. These guidelines set by them allow investors to protect their shares and safely enter or exit trades.
Moreover, these apps also encourage investors to comply with KYC norms to prevent any fraudulent activities.
Conclusion
Stock market trading apps bring convenience and security to your trading experience. While they offer attractive features and easy-to-follow interfaces, they also use measures to protect your information from fraud and cyberattacks.
These apps mainly imply technologies like advanced encryption and 2FA and comply with the regulations set by SEBI. With these in place you can safely buy shares online on your preferred stock trading platform.
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