Cyber threats have been looming big time, posing serious risks to personal and financial information. Data is considered the new goldmine and it is not surprising that every day, a new scam makes news, reminding everyone of the data vulnerabilities.
As a result, it becomes important to safeguard your financial assets, especially Demat accounts. For this, two factor authentication (2FA) is significant. 2FA has been introduced as an effective and mandated security measure to prevent online fraudulent activities and scams and protect investors.
In this article, we will cover two factor authentication in Demat account and its importance in maintaining the safety of your financial data.
Two factor authentication (2FA) in Demat is an authentication measure that improves account security by requiring two separate forms of self-identification.
It usually consists of something unique to a user, such as a password or PIN, and something the user can validate, such as a one-time password (OTP) sent on the registered phone numbers, or biometric verification, such as fingerprint or facial recognition.
The primary goal of 2FA is to add an extra layer of security, making it far more difficult for unauthorised users to access your account, even if they gain access to your password through phishing or other means.
This additional security feature protects sensitive data and financial assets from potential cyber threats.
Your Demat account holds valuable assets such as your stocks, making it a prime target for fraudsters.
Additionally, it has your sensitive information such as KYC details and bank account details.
Enabling two factor authentication for your Demat account considerably reduces the possibility of unauthorised access.
This additional security step assures that even if someone learns your password in any manner, two factor authentication in Demat restricts them from accessing your account unless they also crack the second layer of authentication.
Here are the features of demat account two factor authentication.
Two factor authentication in Demat adds an extra degree of security to your account. This implies that even if your password is stolen or guessed, the attacker will still need the second factor (such as an OTP or biometric verification) to gain access to your account, lowering the risk of unauthorised access.
Phishing attacks are frequent tactics used by cybercriminals to get personal information, such as login passwords. With 2FA enabled, even if you unintentionally submit your password on a phishing website, the attacker will still need the second form of authentication, which they do not have, to block the attempt.
Malware also poses a threat to Demat accounts by recording passwords or keystrokes. However, with 2FA, even if the device is infected with malware, the attacker is unable to access your account without the second factor of authentication, offering additional security against such threats.
The Securities and Exchange Board of India (SEBI) now requires all Demat account holders to have two factor authentication for Demat accounts. Failure to comply with this rule prevents account holders from performing transactions, emphasising the regulatory importance and necessity of two factor authentication in protecting investments and guaranteeing industry compliance.
In an era of growing digital transactions and investments, protecting demat accounts from cyber risks is critical. These accounts contain large financial assets, making them attractive targets for cyber attackers. As a result, 2FA acts as a crucial security measure for your Demat transactions.
Aside from enabling two factor authentication demat account, you can take extra steps to improve account security:
1. Keep Credentials Confidential: Do not share your login information with anyone, even if they offer big returns.
2. Verify Website URLs: To avoid phishing attacks, always ensure that you are on a valid website before entering any login credentials.
3. Use Strong Passwords: To improve account security, create complicated passwords and update them on a regular basis.
4. Monitor Account Activity: Check your demat account statements and transaction history on a regular basis for any unauthorised activity.
Enabling two factor authentication in Demat account is a simple process. Here are the steps you need to follow to protect your Demat account:
Step 1: Go to the Sharekhan website or mobile application.
Log in to the website or mobile app through which you access your Demat account.
Step 2: Sign in and go to settings.
After logging in, go to your profile or account settings.
Step 3: Go to Password/Security Options.
Look for choices related to passwords and security settings.
Step 4: Select two factor authentication.
Here you will receive two options:
1. Enable Fingerprints - this is for adding biometric authentication and also quickens the 2FA process for logging in and undertaking trades in Sharekhan.
2. TOTP: This is a Third-party OTP option where you can use a third-party app such as Google or Microsoft Authenticator App to generate a unique 6 digital OTP for every use. You need to download this app on your device.
Step 5: Receive and enter the OTP.
If you select the option of biometric as 2FA, you will receive a one-time password (OTP) via your registered mobile number and email. Enter this OTP into the necessary field.
Step 6: Additional Authentication (If Required)
Some systems may require additional authentication, such as fingerprint or QR code scanning.
Once you have completed the above steps, your Demat account will have two factor authentication enabled. Remember that the process for different platforms may differ slightly, so carefully follow the directions given by the Demat service provider.
Two factor authentication is critical for protecting your financial accounts, but have you ever wondered why many fall prey to fraud despite these precautions? Here are some common causes and how 2FA eliminates them:
- Users willingly exchange login passwords with unscrupulous organisations promising big rewards on investment.
- Social engineering is when hackers utilise manipulation tactics to mislead users into disclosing their passwords such as fictitious lucrative schemes (i.e. lottery schemes) which may lure investors to share their personal information.
- Users may unintentionally enter their login information on fraudulent websites meant to steal information.
- Using email services with poor security might result in your email account being hacked, enabling intruders to reset your passwords and get access to your trading accounts.
By enabling two factor authentication for demat accounts, you can make sure that your information and financial data are safe and secure. Hackers are getting creative nowadays, and with that, you also need to be extremely cautious about what information you share with people. Brokers never ask for your personal details such as bank account number, OTP, etc. nor do they ask you to share money. So if someone tries to reach you on behalf of a DP, immediately report such instances.
Your safety is in your hands. While 2FA is a security measure, you also have to be aware of not falling for online scams.
In today's time where digitalisation has become the new norm, you can ensure a more secure trading experience and protect your investments by implementing two factor authentication in demat accounts.
Additionally, you should follow the best practices such as keeping credentials confidential, verifying website authenticity, using strong passwords, and remaining vigilant against cyber threats to protect your investments and personal information.
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