How To Start Investment App Development: Benefits, Challenges, Solutions

By Maryna Cherednychenko

People often hesitate to invest because they are afraid to fail or think they do not have enough money to start. Mobile micro-investing solves the problem. Various online services allow you to spend small amounts, minimizing risks to end up with nothing. Such tools are now in demand. That is why it may be a good idea to invest in their development. Before embarking on the development process, we suggest that you study the market and select your target audience. In this post, we will help you do so.

What Is Mobile Investing?

Mobile devices allow anybody to try their hands at brokerage activity. With the internet connection, you can trade from home, office, country box, seabeach, etc. A big plus of the best investing apps is a low price. As a rule, you have to pay from 0.2 to 0.5% of the annual fee to use the service.

The Reasons To Put Money In Investment App

  • 18–29 years old — 12%
  • 30–49 years old — 14%
  • 50–64 years old — 10%

Who Are The Users Of Investment Apps?

To understand what people expect from the best stock trading app, it is worth recalling the typical demographic cohort, which sets millennials, gen X, and baby boomers. According to U.S. News, the first seek low-cost mobile investment tools, while the latter want to invest more to get higher dividends.

Why Invest With Online Apps

Sense of security. With another source of revenue, a person feels more confident. He or she is less afraid of unforeseen events, such as, for example, job loss or natural disaster.

Findependence. Extra money opens new opportunities. A person feels less dependent on the main job. Moreover, he or she can turn the investment activity into the primary source of income.

Building wealth. For a person with average earnings investing might be the only way to get rich. In contrast to nine-to-five work, it requires less time and pays well.

Achieving goals. Big plans need big money. No matter what your purpose is, you can get closer to it by micro-investing. Even small amounts can turn into reasonable sums.

Reasons to invest

Types Of Investment Apps

  • Robo-advisors
  • Online brokerage

Let’s take a closer look at each group

Robo-Advisors. Best Investment Apps For Beginners

  • age
  • income
  • financial goals
  • investment period

Based on the inputs, they automatically manage assets on behalf of the client.

Robo-advisors have a few advantages over human managers. They are:

  • lower regular fees
  • less seed funding required to register an account
  • 24/7 accessibility
  • faster service

Main features of robo-advising apps:

  • individual investment strategy
  • dynamic rebalancing
  • investing schedule
  • goals-based scheme
  • tax optimization

Examples of the best robo-advising apps:

  • Acorns
  • Personal Capital
  • Betterment
  • Wealthfront
  • WiseBanyan

Monetization models:

  • wrap fee
  • interest on cash balances
  • selling financial products to clients (mortgages, credit cards, certificates of insurance)

Challenge: Developing a smart investing algorithm requires a lot of time and effort. You will have to hire true professionals and get ready to invest a lot in app creation.

Robo-advisors vs. Online brokers

Online Brokers. Best Investment Apps For Hands-On Investors

The online broker app is needed to simplify communication with a broker. It helps watch the situation in the markets and gives access to the brokers working in this company.

There are two types of online brokers: full-service brokers and discount brokers. The former offers a wide range of services at a higher price, while the latter supports a limited number of options at a discounted fee.

Unlike robo-advisors, such services do not manage the client’s assets and do not invest on their behalf. They provide investment opportunities allowing users to build their strategy and choose the areas to invest in.

Given this, online broker apps might be more suitable for experienced investors, while robo-advisors are a perfect fit for beginners.

The benefits of online brokerage are as follows:

  • you are your own boss
  • handy investment tools
  • continuous accessibility
  • online support

Main features of brokers apps:

  • stock trading
  • banking services
  • retirement planning
  • education and research
  • human broker assistance

Examples of the best brokers apps:

  • Charles Schwab
  • E*TRADE
  • Interactive Brokers
  • Fidelity
  • TradeKing

Monetization models:

  • charging transaction fee
  • acting as a bank (lower interest for deposits, higher interest for lending)
  • sharing net interest margin with a partner bank

Challenge: Online investment apps that work with human managers are easier to implement compared to robo-advisors. The point is that you don’t have to develop a complex algorithm for automatic investing. However, you will have to hire expert brokers and pay them regularly.

The Roadmap For Your Investment App Development

Anyhow, whatever path you choose, the app development will include:

  • building app architecture
  • producing a smooth user flow
  • integrating with the bank
  • adhering to a specific timezone
  • ensuring app security
  • creating a matching UI/UX design
  • providing testing and support

If you want to make the best stock app, get in touch. We will estimate your idea for free and advise on technologies that are right for your business.

This article was originally published at Softensy.

Softensy specializes in fintech development and enterprise-level apps. Our team helps companies automate business processes by developing software solutions.