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Business News/ Money / Demat accounts through mobile apps: How to operate them and ensure security?
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Demat accounts through mobile apps: How to operate them and ensure security?

Demat accounts through mobile apps: Mobile phones in India have transformed trading, making it convenient and accessible. Retail investors can now open demat accounts quickly using mobile apps.

Demat accounts through mobile apps: Mobile trading offers retail investors unparalleled convenience, enabling them to trade seamlessly from any location. (iStock)Premium
Demat accounts through mobile apps: Mobile trading offers retail investors unparalleled convenience, enabling them to trade seamlessly from any location. (iStock)

Demat accounts through mobile apps: Several brokerages offer demat (dematerialised) accounts that are manageable through mobile apps. The main advantages of these apps are convenience and accessibility for investors to buy, sell, and manage their securities on-the-go. Users can also monitor their portfolios, view real-time market data and execute trades directly from their smartphones. 

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Two decades ago, India stood on the brink of the mobile phone revolution, and today, it has permeated every corner of the nation, with 90% of the population owning mobile phones. This surge in mobile phone adoption has not only transformed various industries but also catalysed the Digital India campaign launched in 2015, which significantly enhanced broadband connectivity even in remote regions of the country.

In contemporary times, mobile phones possess capabilities equivalent to those of computers, becoming indispensable tools for various activities ranging from bill payments to online shopping. This widespread adoption of mobile phones has also spurred advancements in financial services.

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Also Read: What are the charges associated with a demat account?

Stockbrokers and fund managers have developed their own infrastructure, such as apps, enabling clients to conveniently trade and invest directly from their smartphone devices. Even traditional brokerage firms, boasting decades of expertise, have introduced their own mobile trading platforms.

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Today, the majority of stockbrokers provide clients with both mobile trading applications and web-based platforms. 

In this article, we will explore how retail investors can fully manage their demat accounts using smartphones. Additionally, we will address important questions regarding the security measures that retail investors should consider when trading via mobile phones.

Rapid growth

From the advent of web-based trading platforms to the rise of mobile trading apps, the landscape of trading in the Indian stock market has undergone a remarkable transformation over the last two decades. Trading has become incredibly convenient, with a smartphone and a network connection being all that's required.

These days, opening and managing a demat account has become significantly more accessible, largely due to the widespread availability of mobile trading apps. In less than a day, an investor can open a demat with the help of their mobile phones, submitting all necessary documents online. 

Also Read: Can investors hold multiple demat accounts in India? MintGenie answers

Trading from mobile picked up momentum in 2019, during India’s first lockdown. With people working from home and schools closed, individuals had more free time to explore investment options, and they preferred using smartphones. 

During this period, discount broking firms experienced a surge in popularity among retail investors, emerging as preferred options for mobile trading as these firms facilitated account opening through mobile apps, providing users with a seamless and convenient experience directly from their smartphones.

This accessibility has enabled young Indians to swiftly open demat accounts and commence trading directly from their mobile devices.

Also Read: Demat Account: Can it be accessed from anywhere and how safe is it? MintGenie answers

SEBI, the market regulator also, introduced "Saa thi," SEBI’s mobile app, with the objective of educating investors about essential securities market concepts, KYC Process, trading and settlement procedures, mutual funds, recent market developments, investor grievance redressal mechanisms, and more.

Similarly, NSDL, the depository, launched a mobile app called 'NSDL Speede' for investors. Through this app, investors can conveniently view balances in their NSDL demat account anytime, anywhere, submit delivery instructions and mutual fund redemption instructions (for SPEED-e users), submit online nominations, confirm off-market instructions (using OTP), confirm e-DIS and Margin Pledge Initiation instructions, and participate in e-voting. 

Accessibility and convenience

Mobile trading offers retail investors unparalleled convenience, enabling them to trade seamlessly from any location. With just a click, investors can buy and sell shares and manage their entire portfolio directly from their mobile phones. They can also transfer and withdraw funds conveniently through mobile platforms.

Also Read: Can I hold bonds and mutual funds in my demat account? Mintgenie explains

Moreover, trading via mobile phones provides investors with real-time access to crucial market developments and investment-related information. One of the primary advantages of mobile trading is that it empowers anyone to access market data at the same speed as professional brokers or registered clients.

Furthermore, retail investors can access their demat accounts from anywhere globally, as long as they have an internet connection. This flexibility allows investors to stay connected to the market and manage their investments regardless of their physical location.

Security measures are in place

In today's digital age, prioritising the security of your demat account is crucial. Brokerage firms employ stringent security measures to protect your assets and sensitive information. These measures encompass encryption protocols, multi-factor authentication, and frequent security audits aimed at identifying and thwarting unauthorised access attempts. Furthermore, implementing secure login procedures, such as employing robust passwords and biometric authentication, enhances the overall security posture of your account.

Also Read: What is a Power of Attorney for a Demat account? A look at its types, precautions to take and FAQs

FAQs

Who is a stock broker?

A stock broker is a registered intermediary recognised by SEBI and affiliated with a stock exchange. They are authorised to conduct trades on stock exchange platforms.

What are the essential accounts needed for trading in the securities market?

Demat Account: This account, opened with a SEBI-registered depository participant, holds and facilitates the transfer of securities.

Trading Account: Established by a SEBI-registered stock broker, this account enables investors to trade securities.

Bank Account: Linked to the investor, this account is utilised for funds related to trading in the securities market.

How can an investor place orders with the broker?

Internet-based Trading: Eligible brokers provide access to the market through their app or website. Investors can view live price quotes and place orders independently.

Mobile Trading: Similar to internet-based trading, investors can download applications/tools provided by eligible brokers to trade on stock exchanges using their mobile devices.

Call and Trade: Investors can contact their broker, provide their Unique Client Code (UCC), and place an order. The broker's dealer will execute the order and confirm its status over the call.

Visit to the Broker's Office: Alternatively, investors can visit the office of the stock broker to place orders in person.

What is pay-in and pay-out?

Pay-in: This involves transferring funds or delivering securities to the clearing corporation to settle buy or sell trade obligations, respectively.

Pay-out: It is the process of transferring funds or delivering securities from the clearing corporation to settle sell or buy trades, respectively.

Pay-in and pay-out are integral parts of the settlement mechanism, and the scheduled dates for these transactions are notified by the stock exchanges periodically.

Can I access my demat account from overseas?

Yes, typically, you can access your demat account from any location worldwide, as long as you have an internet connection and the requisite login credentials.

 

 

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Published: 12 Apr 2024, 12:26 PM IST
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