Recently, I was exploring App Annie to know the top finance apps in the App Store. I was thrilled to know that nearly 30% of the FinTech apps in the USA are mobile trading and how to create an investment platform.
Most of these apps are solely meant for investing, while others offer investing as an add-on feature. However, the figure isn’t surprising. A report by Reports and Data states that the global online investment platform market is expected to grow from $767.3 Million in 2018 to $3,570.4 Million by the end of 2026.
Online Investment Market Growth Indicators
Trading and Investment apps have been popular In the recent past. In these unprecedented times, people want to utilize the market volatility to get rich, and a mobile investment app is the perfect instrument for this.
Here are the signs of a growing market for investment and trading software solutions:
Users Are Continuously Increasing
The argument is backed by the fact that one of the most popular commission-free trading apps, Robinhood, has been gaining 4 Million new users every year.
The app grew to 6 Million users in 2018 from 2 Million in 2017. And in the first four months of 2020, the user base reached 13 Million users.
Many Banking Apps Are Adding Investment Features into Their Apps
Even with a glance at the App Annie screenshot I’ve shared, it is clear that state-of-the-art banking apps are gradually implementing investment features to become more versatile for their customers. Some banks directly add the feature into the existing banking app, while others have launched standalone apps for investment like Bank of America’s MyMerril App.
Millennials Love Taking Risk Online
Recently, Investopedia conducted a survey of 1405 Millennials, Gen Z, and Gen Z. the survey found that only 23 to 38% of their money is invested. Almost half of their income resides in savings and checking accounts. Hence, the potential to capture a new user-base is very high.
Types of Investment Platforms
Although, there aren’t any specific types of investment platforms. But, we can distinguish between different investment platforms in terms of the way you create an investment app.
Investment Platforms by Device Support
Based on your target audience demographics, you can decide which platform you should create an investment app. The device you focus on for your investment app will decide the technologies you would use for your investment and trading software development.
Investment platforms that focus on catering to a larger segment of customers would create an investment website or app for multiple platforms. The Fidelity Trading App is a perfect example of an investment app built for several smart devices. The Fidelity Trading App can be accessed from:
- Apple Watch or Apple TV
- iPad and Kindle Fire
- Amazon Alexa and Google Assistant
The argument is not to convince you to create your investment app for every platform; it is just to make you aware that you should keep your target audience in mind while developing your investment platform.
Day-Trading vs. Investing Platform
When investment methods are of different types, the investment apps have to be specialized for every one of them or just all of them. Some investment apps are optimized for day trading, while others are suited for long-term investing.
Some investment apps like M1 Finance restrict the users from trading the same stock more than once a day. At the same time, other apps like E*Trade or TD Ameritrade are perfect choices for the users who prefer day trading. However, these apps also support long-term investments.
Skill Level of Investors
Apps like Stash, Acorns, Robinhood are highly optimized for novice investors, while other advanced electronic trading platforms like E*TRADE and Ameritrade are built for educated investors. New users would have to spend some time learning the fundamentals and functionality of these apps. It is always recommended to keep the learning curve at exponential growth.
Apps that aim to novice investors include a lot of training material and support of Robo-Advisors. While professional investment apps usually offer advanced investing options like four-legged spreads.
How an Online Investment Platform Works?
An online investment app/platform is an online service for buying, keeping, and selling funds or equities. The new Direct to Customer (D2C) investment platforms allow individuals to directly trade equities or funds with a couple of models (non-advised and advised service).
Given the popularity of online investment platforms, they’re considered a tax-effective way to hold investments. The platforms act as investor and borrower aggregators where different providers can offer different funds at different discount rates. This gives the investors and borrowers access to a wide range of funds.
With many online investment platforms, the investors will also have the ability to manage several different products under one roof. With cloud computing in place, investors can also view and monitor the investment progress anytime via their desktop or mobile devices. This means that the investors can quickly make the potential adjustments due to market change.
Features for Investment Platforms
Quick and Easy Authentication
You have to let users in to allow them to invest via your platform, right? As regulations in the FinTech space are getting tough day by day, user authentication has become as crucial as data encryption. However, designing the perfect user authentication process isn’t simple. The simplest thing you can do is use the biometric authentication supported by the user devices: Touch ID, Fingerprint Sensor, Face ID, or others.
When it comes to gathering financial information at the time of customer onboarding, you can ask them to link their social profiles for personal data and use open-banking APIs to obtain the financial information related to every customer.
The user profile holds all the information and preferences of a user. The users would access the profile page to know or alter the information related to their account and portfolio. Trading/transaction history, preference and other settings, subscriptions, and help are among the content users can find in their profile section.
The home screen should consist of information like the amount a user has invested, the current value of every stock and profit earned from them, and the best performing equities or funds. The homepage can also incorporate the news and opinion section where the investor can read personalized news and updates.
Since the advent of AI and ML in the FinTech space, Robo-advisors have become popular as the democratization of investment brings a new line of investors who need investment advice at almost no cost. Some trading apps even go as far as offering human advisors. But in the beginning and for most of the users, Robo-advisors are enough.
Seamless Investment Strategy
The main feature for every online investment application is the ease of buying stocks or other financial instruments. The users would expect to get the data in a streamlined and visualized form. For example, you can implement candlestick charts for the stock prices over time. The stock page should have company details, a financial statement overview, Robo-advisor ratings, news, reports, and research related to the company. Having all such information, the users would be able to make their decision of investing in easily.
Search and Filters
Your investment platform should have a robust and streamlined search engine that provides various options to search form. Integrating filters will also help users find the right type of stock. For example, some users would be seeking a stock by the company instead of searching for the stock symbol: Apple for AAPL.
Stock Discovery Pane and Favorites
When several stocks are available on the platform, it becomes cumbersome for the users to keep track of their favorite stocks. It is essential to group stocks based on several parameters such as trends, stability, return, etc. the graphical representation of the data is equally important.
Some Additional Good-to-Have Features
Most of the time, the following additional features aren’t included in the initial version of the investment apps. Some platforms first launch a minimum viable product (MVP) that only has essential features, and later they upgrade the app according to the user feedback and market trend.
However, it is worth getting familiar with these features as they can make your app stand out from the competition.
- Dividend reinvestment
- Fractional shares
- Customizable home screen widgets
- Retirement account
- Fractional shares
- limit/stop/trailing stop orders
Things to Consider While Developing Investment Platforms
As stated earlier, you should be clear about your target audience profile and your business type (B2B or B2C). It is crucial as the investment app architecture will depend on it, with B2B tends to be more branched out and complicated.
We’ve experienced many novel challenges while developing a recent online investment platform. Based on them, I’m listing some considerations that you should keep in mind while developing your investment platform or app.
Sometimes, you would be forced to build your app/platform architecture in pieces. Especially when you don’t have a clear understanding of your target audience or a FinTech app development company, you might deal with clients with incomplete requirements and may or may not know their target user base.
When building your architecture part by part, you’ll refactor the parts that turn out unusable in the later stage. Although it is possible to change one element, you risk affecting other connected parts that don’t require change. Hence, before you create an investment platform, you should decide on your target audience.
However, the platform needs a human touch as the advisors are operating it. Each advisor would have an administrator panel to communicate with the novice investors that require help with investing. The panel would allow advisors to calculate customer scores, assess risk, and access credit history to determine the best investment methods for the customers.
The open-banking infrastructure worldwide has made it possible for investment platforms to obtain financial information about new customers. After the customer feeds in information while registering, the investment platform can access customers’ credit scores, financial status, income, and much other information.
Based on this data, every user is assigned a credit rating or score that serves as the base for investment suggestions. Also, it is essential to integrate exchange rates into the service for effective bank integration.
It will help if you decide the banks you want to integrate with as the architecture heavily depends on it.
Target Country and Time-Zones
The countries where the banks you want to integrate with are also located and play a significant role while developing the investment platform. Of course, the rules and regulations vary per country, as do the running hours. For instance, in the United Kingdom, the banks would only provide financial information about customers during work hours.
Many investment website developers face trouble while the banks are closed and customers sign in. The platform owners have to make the data unavailability a no-concern for the users. You cannot just close the app on weekends when banks are closed. Therefore, on weekends, you can extract the data from more recent updates. This way, whenever the customer makes an inquiry on Saturday or Sunday, the customer would get the investment rates from Friday. However, it would be best if you made your customers aware of the data extraction from Friday.
Software Development Methodologies
Depending on the requirements, you would pick your development methodology. It is recommended for unclear and incomplete requirements to use Agile development methodology, whereas, for clear and defined software requirements, waterfall development methodology is suitable.
With agile in place, the developers would develop the investment platform in several iterations. Hence, it becomes easy for the developers to incorporate changes in the software requirements.
So, now you know how to create an investment website. But, you’re not sure about whether you should develop it in-house or outsource it to a software development company. Recently, I’ve written a blog post about why you should hire a software development agency for your technology requirements. You can read it here: In-House vs Outsourcing Software Development – nimbleappgenie