Online Share Trading : Now, Get Ready to Key in Two Passwords

Online (Internet) Share trading could soon get cumbersome for brokers & investors with the mandatory introduction of 2 factor authentication for online Share trading by the end of this March month (2012).

In a bid to make Internet trading more secure, Indian Share market regulator Securities and Exchange Board of India (SEBI) has made  2factor authentication, in which the user provides 2 means of identification, compulsory for online share transactions

Time Sensitive Business..!

However, experts said broking being a time-sensitive business, a second login could take extra 10 to 30 seconds by which time stock prices may change.

Mr. Aseem Dhru, MD,  HDFC Securities said, “If the customer has to login twice, whichever method you use, it will take extra time. This is a matter of concern as stock prices change every second"

The 2 factor authentication is a security process in which the user provides two means of identification, one of which is typically a physical token, such as a card, and the other is typically something memorised, such as a security code.

The purpose of 2 factor authentication is to check incidence of online fraud as the victim’s password will no longer be enough to give a thief access to his or her information. While some broking houses have already implemented 2 factor authentication, it is yet not clear which method brokerages will adopt to generate the 2nd password.

 Mr. Yagnesh Parikh, senior VP Technology, ICICI Securities, said, “In addition to the normal login password, all customers will need to input either their DOB (Date of birth) or PAN (Permanent Account Number) as 2nd factor authentication''

ICICI Securities,  which has about 22 lakh ebroking clients.

Mr. A Balakrishnan, Chief Technical Officer, Geojit BNP Paribas, “Customers can use mobile handsets or matrix cards for 2 point authentication.”

While the first password will remain the same, for the 2nd password a unique number will be generated and sent as an SMS to the investor’s registered mobile number.

However, this process could have its own disadvantage. SMS at times tend to get delayed, which could delay your login even as the stock price changes.

Brokerage firm Sharekhan said, ''We have already implemented 2 factor authentication. Each investor has to login using a membership password and trading password”

Others such as Motilal Oswal &  HDFC Securities are yet to decide on the method to be used for 2 factor authentication.

Share market experts said 2 point authentication is likely to be cumbersome for both investors as well as share brokers. For brokers, there is likely to be extra technological cost in adopting any of the methods. Also, reaching out to customers will take more time.

Src: ET
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