What is Demat 2.0?
It is a completely technology-based investment management platform which is based on automation, analytics and AI-assisted insights launched by SEBI.
There are different features added with this 2.0, such as smart portfolio dashboard, AI-assisted insights, real-time alerts, risk analytics, and gold-based investing.
What is the difference between Demat 1.0 and Demat 2.0?
The core purpose of Demat 1.0 was to digitally hold securities, whereas Demat 2.0 emphasis on managing the entire portfolio digitally. The entire process was done manually and Demat 2.0 changed the way of investment activities by focusing on allocation, concentration and performance.
The major advantage of Demat 2.0 is it is focused on AI which mitigated the limitation of traditional portfolio management activities and benefits investors to design portfolios based on portfolio level risk.
Advantages
Portfolio analytics: Understand investments requirement
Automated alerts: Reduce missed information
Corporate-action evaluation: Understand concentration
Risk factor: Understand concentration
Tax factor: Easier tax preparation
Goal tracking: Connect investments with objectives
AI explanations: Make complex information easier to understand
Limitation/Risk
Limitaiton in decision making of AI
It helps in managing portfolios but never assure guaranteed returns and there might be issues as there is no human intervention in real-life issues.
Data privacy issues
AI collects personal information and utilise it appropriately to provide personalised assistance. However, technical glitch or cyber threat often create data privacy issues and it is a challenging factor for Indian investors.
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