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Safety & Security Features to look for in an Online Trading App

Safety & Security Features to look for in an Online Trading App

When thinking about which app to download for trading or investing, the safety of your funds should be paramount.

A lot of investment and trading apps are available online but they may not offer the same security features. Some features that come as standard in one App, may come as optional in another App, meaning you have to pay extra for that feature.

Some users depend on websites that compare brokers for information to guide on which brokers App to download but sometimes these comparisons don’t take App security into consideration or recommend apps which through which they can earn more in commissions.

Conscious effort should be taken to choose an App that provides water tight security and conforms to ISO global security standards.

You need to single out those features that are important and a must have and then make sure your online trading App provides them. Here are some important and must have features.

Feature #1 – The broker must be licensed

Every broker must be regulated and licensed by a regulatory body for it to operate legally. For example, the brokers that offer currency & CFD trading to retail traders in the UK must be regulated with the FCA.

Karan from Safe Forex Brokers UK advises on the importance of the broker being regulated with FCA. A regulated broker needs to abide by rules set by the regulator and also render periodic reports about their activities to the regulator for it to remain licensed.

The regulator also has the power to sanction any erring broker and even suspend/revoke their license. Some regulators also require brokers to contribute to an Investor compensation fund which is used to compensate investors who suffer loss of funds due to the failure of a broker to carry out his responsibilities.

Every legitimate broker gives information about the body regulating them on their website. Once you check your brokers website and get the name of the regulatory body that licensed them, head on to that regulatory body’s website to confirm if your brokers name is actually on their list of licensed brokers.

Feature #2 – Two factor Authentication (2FA)

2FA involves two layers of security verification. It could combine something you know such as a password and something you have such as a mobile phone or hardware token or passwordless signins.

2FA can be activated in your app for login as well as for authorizing sensitive transactions such as linking a new account to your trading App, withdrawals and deposits etc.

For example when trying to withdraw money, the app could ask for a combination of your password and an OTP verification code that will be sent to your mobile phone or email address.

If your App doesn’t have 2FA, and cyber criminals lay hands on your password, they could easily gain unauthorized access, link a new account, sell your securities like stocks you own and ultimately withdraw the amount in their account via payment method like cryptos, if your broker supports it, if the broker does not properly verify the withdrawal requests.

A good trading app should also reject weak passwords during the password creation stage. It should prompt the user to create a password that contains capital letters, special characters and numbers.

Feature #3 – Notifications

It can be stressful sitting in front of your computer system and monitoring every activity all day. Sometimes you could be away from your computer or mobile phone and this is when notifications become important.

Your App should allow you to enable notifications for activities such as when a position is opened, position closed, announcements, margin call, take profit, etc.

These notifications could be in form of SMS or email messaging and should play a sound file loud enough to alert you immediately. This will ensure you don’t miss any opportunity because you were not watching the screen always.

The app should also allow you to get security alerts for logins. Email notifications could be sent to you each time you log on to your app or web platform, stating the time you logged on and the date and also for each time you change a password. This is to create an audit trail so you can review and see if someone else logged on to your App.

Feature #4 – Automatic account immobilization

A good app should be able to immobilize your account after a wrong username or password has been inputted several times.

This is because it may be a hacker trying different passwords on your account to see if he can get lucky, or they may be attempting a brute force attack. To regain access to your account, you could be required to contact customer service to unlock your profile, or enter the OTP sent to your phone.

Feature #5 – Account history

Your App should let you download your account statement in various formats such as PDF, excel etc. the date range for download should not be limited but the app should allow you to see your account history from inception till date.

This will enable you to review account activity especially outflows from your account, and be sure they were all authorized by you.

Feature #6 – 24 Hour customer service channels

You should be able to reach your broker anytime of the day since there could be an emergency where you might need your account disabled urgently. Sometimes a client could ignorantly divulge his login credentials to fraudsters and may need to lock his account as soon as possible.

It is good if the app has inbuilt chatbot that answers frequent questions and the ability to connect to an agent for customer service to help resolve urgent issues even on weekends.

Feature #7 – Risk management tools

Your trading app should help you manage the risk faced during online trading by providing tools such as Guaranteed stop loss orders and limit orders.

Stop loss orders allow you to set a stop price that when crossed closes out your position and activates a market order immediately. This will prevent you from losing almost all your capital should the market continue moving against you.

Feature #8 – Biometrics

If your trading app supports biometric functions like fingerprint login, facial recognition, iris recognition etc. instead of logging in with your password, you could simply login via fingerprint scanning or facial recognition.

This will add an additional layer of security to your account.

Feature #9 – Inactivity Timeout

When you log in to your account and do nothing for a certain period of time, your active session should be automatically logged out and the app should prompt you to re-enter your login details when you are ready to use the App again.

This is a safety precaution to prevent a third party from sneaking up on you and using your App while you are away.