Ever since the introduction of electronic trading, the risk of unauthorized access to trading and Demat accounts of investors has always been there. However, recognizing the need to make trading accounts more secure, Motilal Oswal brought about two-factor authentication, also known as 2FA, way back in the year 2012. The introduction of this feature was in line with the SEBI circular issued on June 30 2011, that mandated the use of two-factor authentication for all stockbroking accounts.
If you’re someone who uses Motilal Oswal’s trading app to invest in the stock market, knowing how to enable such a feature is very important since it can help you secure your account from unauthorized access. Continue reading to find out just how you can do it.
Two-factor authentication (2FA) is a security process in which a user is required to provide two forms of identification to access a service or device. This is typically done by combining a password with a second form of identification, such as a fingerprint, facial recognition, or a unique one-time password (OTP) sent to your registered mobile phone number.
The primary goal of 2FA is to provide an additional layer of security to protect against unauthorized access, particularly if a password is stolen or guessed by unscrupulous individuals.
We’ve come up with an example of how two-factor authentication works to help you better understand the concept. So let’s take a look.
Assume that you wish to log into your trading account. You visit the trading portal of your stockbroker and enter your username and password to log in. Now, if there’s no two-factor authentication enabled, you will be logged into your trading account instantly.
However, what if the username and password of your trading account were leaked, stolen, or guessed by an unscrupulous individual? In this case, they would be able to gain unauthorized access to your account and be able to use it since there’s no two-factor authentication to protect it.
Now, let’s say that you’ve enabled two-factor authentication for your trading account. In this case, when you log into your account by entering your credentials on the trading portal of your stockbroker, you will be prompted to provide a second form of authentication. This second level of authentication would most probably be in the form of a one-time password (OTP) sent to the mobile number associated with the trading account. Only upon entering this OTP in the relevant field will you be allowed to finally gain access to your account.
Therefore, even if the hacker gains access to your username and password, they will not be able to log into your account without providing the right OTP, which will be sent to you.
Two-factor authentication via OTP is automatically enabled for all Motilal Oswal trading accounts. However, you can go one step further and enable biometric 2FA, which will allow you to authenticate your identity by using your phone’s face recognition module or fingerprint sensor. Here’s what you would have to do to enable this feature.
Now each time you open your Motilal Oswal mobile application, you can simply use your biometrics to authenticate your identity and log into your trading portal.
Now that you’ve understood what two-factor authentication is, let’s take a quick look at a few of the benefits that you get to enjoy by enabling such a feature.
The primary advantage of 2FA is that it provides an additional layer of security to protect against unauthorized access. Passwords can be stolen or guessed. However, with 2FA, you can ensure that even if your password is compromised, the attacker will not be able to access the account without the second form of identification.
Protection against phishing attacks
Phishing attacks are a common way for hackers to steal personal information and gain access to online trading and Demat accounts. 2FA can help protect you from these attacks by requiring a second form of identification, which can only be provided by you, the legitimate user.
Protection against malware
Malware is another common way for hackers to gain access to online trading accounts. By requiring a second form of identification, two-factor authentication makes it more difficult for malware to access your trading account.
Two-factor authentication is very convenient and only takes a few seconds to complete the verification process. For instance, in the case of the MO Trader or MO Investor smartphone application, you can enable biometric 2FA, which uses your phone’s fingerprint sensor or facial recognition technology to authenticate your identity.
If you own a smartphone with a fingerprint sensor or a facial recognition system, go ahead and enable biometric 2FA to secure your account from unauthorized access. On the other hand, if you don’t have an account to trade from, visit Motilal Oswal to open a Demat account and a trading account today. With these accounts, you can invest in stocks, bonds, and upcoming IPOs.
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