The advent of online trading platforms has made investing and trading accessible to the general audience. People no longer need a middleman, preferring to use stock apps like Robinhood to trade. As a result, the market of easy stock trading apps can skyrocket in the years to come. Yet, for now, it is still relatively niche, waiting for the new grand players.
However, there is a bunch of practical questions when you start to create an investment platform. That’s all right, in this article we will uncover them all.
Investment Software Market Overview
The modern market of Robinhood-like apps is driven by users that want to invest with little money. Today, each person can download a stock advisor app and start investing right away. The overall investment process has become more simplified and affordable due to the zero-fee investing trend.
So, it is a viable choice for the existing trading businesses to invest in stock trading app development, improving their services, and increasing their customer base.
According to the Market Study Report, the stockbroker app market is expected to reach $4497.9M by 2025. However, there are just a few major players in the investment software market right now, Robinhood being one of the brightest ones. Robinhood has managed to engage 22.5 mln, active users, since its launch in 2014, according to Statista. Despite its vast popularity, the Robinhood web app also faces severe criticism in the finance field due to its gamified approach to trading and many other aspects. So, the best stock app is yet to be developed.
How Does an Online Investment Platform Work?
A good understanding of an online investment platform’s basics is a must if you want to find out how to make a stock market app. Let’s get through them.
A stock app like Robinhood provides insights that can be useful when deciding where or how much to invest. Typically, it is shown in the form of a graph, and users can learn the investment news, the performance figures of the company they invested in, etc.
These platforms need technologies, including big data, data analytics, and others, to provide profound analysis. So, typically, to develop an online investment platform, you need a trustworthy technology partner.
However, keep in mind that different types of investment platforms have their peculiarities in terms of development. There are different classifications of stock investment apps. For instance, some experts distinguish them depending on investment types.
Types of Trading Platforms
If you wonder how to build a stock trading app, you have to understand what investment types are there. Each investment type can be a niche for stock trading app development.
Your potential users can invest in:
- Actively managed funds;
- Exchange trading funds (collections of stocks, bonds, etc.);
- Index tracking funds;
- Business projects;
- Social projects;
- Investment trusts.
Nowadays, the most vastly used investment platforms are the ones for exchange-traded funds. So, let’s focus on them a bit more.
Exchange-traded funds (ETF) trading platform apps help their users take part in stock trading. A bright example of such applications is Robinhood. ETFs are divided into four subcategories, each of which can also be a separate app type. These are the following:
- Sector ETFs present exposure to certain sectors of the economy (e.g., retail or technology);
- Foreign market ETFs present exposure to economic blocks (e.g., EU), regions (e.g., Latin America), or separate countries;
- Style of investment: for instance, investing in large-cap stocks;
- Asset class: The exchange-traded funds that hold one type of asset (e.g., high-risk bonds.)
What are the peculiarities of exchange-traded funds that influence custom software development for them? ETFs are sold on stock exchanges every day, so when creating a features list, you should take it into account. It is a good idea to present an analytics graph of how the stock performs at the given moment. This will allow your users to decide whether to change the sum they are investing in a certain stock.
No matter what stock advisor app you want to create, keep in mind four main steps you should take to develop it successfully.
4 Tips on How to Build a Trading App That Succeeds
As we at Visartech have learned from our experience, there are four most effective tips that will help you develop a successful Robinhood app alternative:
- Perform a thorough competitor analysis
Study carefully what the market has to offer, analyze it, and create something even more useful, convenient, and secure.
- Consider the fintech-required compliances
Compliances are of prime importance when it comes to the financial sphere. So, make sure your trading app like Robinhood complies with all the required regulations.
- Hire a team for custom software development
Your technology partner heavily influences your business success. So, take your time to choose a vendor that is highly experienced in the financial domain.
- Create a list of features your application should have
Compiling a list of app features is no easy task. It requires many steps you can’t neglect. For instance, you should perform thorough research on your competitors. Also, you have to set clear objectives of what your stockbroker app should be doing. Keep in mind that all the features should be based on the objectives of your business. It is a complex process. However, we have come up with the five most critical features a stock investment app should have.
8 Key Features of a Stock Trading App like Robinhood
Each trading application can have a wide variety of features, so it is really up to your choice. However, in terms of stock trading app development, it is a good idea to focus on the core features that your app must have to satisfy the critical needs of your end-users.
Let’s break it down to the user path. It goes as follows: registration, setting up a personal profile, adding bank card, stocks assessment, and payment. These five features are the bare minimum your online trading app needs to be competitive in the market.
There are different ways to implement each of these features. Anyway, we will focus on the best practices our app development company has come up with.
#1. Registration of a Personal Profile
This phase should be as simple as possible. So, it is a good idea to offer a few ways of registration (e.g., via Facebook, Google, Apple ID, etc.) You can also add the possibility of signing in with the e-mail/phone number and a password. No matter what options you add, make sure they are all secure. We will dwell on security more later in the article.
To add a personalized touch, add the feature of a personal profile in your app. There your users should be able to add their data, photos and see their performance.
#2. Adding Bank Card
In this section of your Robinhood-like app, the users should be able to add their bank account information to actual trade. This feature is one of the most critical ones for your online trading app. So, make sure this section is easy to use and the data is secured.
#3. Third-party Payments
Payments themselves also must be secured. So, link the trusted third-party payment services to your top stock trading app. For instance, you can integrate your service with the giants such as PayPal, ApplePay, Google Pay, or similar ones.
Typically, analytics in apps similar to Robinhood is implemented through charts. They in turn are enabled by complex technologies, such as data science, artificial intelligence/machine learning (AI/ML), and others. So, to apply this feature successfully, you need a partner with extensive data and data visualization expertise.
Charts differ in terms of their complexity: basic charts, for instance, indicate moving averages, Bollinger bands, etc. More sophisticated ones, at the same time, may include line break charting, Fibonacci plotting, and more.
The most important aspect of analytical charts, however, is adding trend lines. These will help your users make informed decisions on where to invest.
#5. News Feed
This feature is critical, especially if you plan to develop a trading platform for beginners and day traders. Such users of a Robinhood app alternative rely heavily on trusted resources, such as Reuters, Dow Jones Newswires, PR Newswire, etc. So, it is a good idea to integrate the latest relevant news from these editions into your news feed of your similar to the Robinhood web app.
Also, you can add insights from the scanning tools.
#6. Scanning Tools
AI-powered scanners look for potential trades on the stock market. Like analytic tools, scanners can be of different complexity levels. For instance, simple scanning tools can provide insights on the most attractive stocks at the moment, companies that are on the rise, or, vice versa, in decay. A more sophisticated scanning system, at the same time, can look for specific patterns, thus helping your users make more informed investing decisions.
#7. Fundamental Research Tools
Such tools allow your users to quickly access information on the companies they plan to invest in. Research tools that provide insights into financial metrics, news, and other information relevant for trading. So, rather than searching the internet, your users will look up the information in your app. This in turn will help your trading platform serve as a one-stop-shop, increasing the time users spend on it, which results in your revenue growth.
Reliable support is critical when you create a trading platform. The success of your stock app like Robinhood depends heavily on how you support your users. Keep in mind that speed is of the essence when it comes to trading. So, make sure that your users can get support (no matter technical, trade, or administrative) directly via the platform.
Although the mentioned features are useful, they will be nothing if they are not secured. Yes, security and data protection are cross-cutting themes when it comes to the development of investment apps like Robinhood.
Data Protection in Trading
There are best data protection practices used in stock trading app development to make a stock trading app secure such as:
- biometric authentication
Biometric authentication is a security measure widely used in the finance industry, and trading platforms are no exception. Basically, users can access the app only with biometric data (fingerprint access, face recognition, etc.)
- multi-factor authentication
This security layer requires users to enter a verification code and password when logging into your investment app. This code is typically an “OTP” (one-time password) generated with an app (e.g., Google Authenticator).
- defending your users from cybersecurity threats
There are different ways to prevent cyber attacks from happening: to implement a feature of automatic log out from the app when the user session is over; to provide regular security patches that are installed automatically; to allocate your app only on the trusted marketplaces (e.g., Google Play, App Store).
- data encryption
This security measure is critical, as trading platforms store sensitive user information, such as cardholder details. Storing such information without encryption may lead to hackers siphoning funds of our users.
The mentioned security measures do not come to their full power without some fintech regulations. How to build a trading platform that will transparently operate in the market? Let’s proceed to the compliances your stock trading business requires.
Regulatory Compliance in Financial Services
When you choose the target country for your trading app, like Robinhood, it is a good idea to research local compliances for the fintech industry. Let’s view some in the USA and the UK.
The United States
For instance, the local fintech market sticks to the laws of CFPB – Consumer Financial Protection Bureau in the USA. This authority implements consumer protection laws. If the user rules of a trading platform are vague, its owner will be fined.
Some other organs that regulate financial services in the USA are:
- CFTC – Commodity Futures Trading Commission;
- FinCEN – Financial Crimes Enforcement Network;
- BSA – Bank Secrecy Act.
The United Kingdom
Each and every stock investment app operating in the UK must adhere to FCA regulations. This institution regulates the fintech industry standards.
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Also, countries typically have Anti-Money Laundering laws which should also be considered when you create an investment app.
When the security part is rather clear, let’s move to the most critical business outcome: revenue.
How Robinhood App Makes Money and Other Ways of Monetization?
Before diving into the investtech app development, you should have a clear vision of your business model. Different monetization methods will help you grow your earnings. Let’s take a closer look at them.
Collecting interest is one of Robinhood’s monetization methods. They collect a percentage of funds that are uninvested yet but reside on balance. However, the app is widely criticized for it.
Freemium is another app monetization strategy adopted by Robinhood. With a Robinhood Gold account, users can access extra margins, stocks, and prolonged hours of trading.
The name of this method is created through the merge of the words “free” and “premium.” So, this way of monetization allows the users to download an app for free but pay for premium features. When it comes to trading platforms, you can provide more market analytics for premium users or make the premium version ads-free. However, make sure that inaccessibility to the premium features shouldn’t make your application unusable.
- Fee per trade
Yet another app monetization strategy to consider is charging a fee for transactions within your app.
Top 3 Alternative Applications Compared to Robinhood
Robinhood is not the only successful trading platform, let’s take a look at the others and find out what’s the best stock app in the market.
M1 Finance is a money management tool that allows its users to manage their finance and investments in a single environment. This application is different from the traditional brokerage apps in that users buy in percentages, not in shares. Users of this app set up how much they want to invest – e.g., 15% in Tesla, and the application automatically withdraws the money from their account by the time the investment is canceled.
M1 Finance Pros:
- no trading fees;
- automatic in-app money withdrawal;
- offers both stocks and EFTs;
M1 Finance Cons:
- not fit for active traders;
- does not offer tax-loss harvesting.
WeBull is a US-based app, aimed at day trading, so it shows the market changes in a short time (e.g., day-to-day). The trading platform has streamlined customer loyalty programs, providing its users with bonuses (e.g., free stocks).
- sign up bonuses;
- fast setting up an account;
- zero-fee trading;
- no in-app money transfers;
- deficient support;
- poor product portfolio.
Vanguard has meager expense fees on their mutual and index funds, which is the main benefit of this platform.
- availability of low-cost funds;
- extensive fund base;
- zero-fee trading;
- limited analytics and research tools.
Each stock investment app has its pros and cons, so the best stock app is yet to be created.
What Does It Cost to Build a Trading Platform Like Robinhood?
As usual – investment platform development cost depends on a wide range of factors. The app complexity, website domain registration, the development team composition, seniority, and the cost of living in your business location are just some of the factors that influence the final price. Typically, it takes over 2,000 hours to develop a trading platform.
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In addition, the average hourly trading app development cost will vary because of different technologies and the geographic location of the development team.
|Tech Stack||Average Rate Worldwide/hr|
The technologies that you will implement will also have a crucial impact on the app development cost. However, investing in advanced technologies pays off in the long term perspective. Using the up-to-date technologies for the product development will ensure its convenience and stability that will allure and keep consumers by your side.
How Visartech Can Help in Trading Application Development
Visartech has long-standing expertise in fintech and banking domains. We create a wide range of fintech solutions for banking, investing, financial planning, and more. For instance, our professionals have developed a loan management platform – a secure solution used for money exchange between family members and friends.
Developing a trading platform with Visartech entails the following steps:
- outlining the concept of the trading solution you want so that it meets your business needs
- creating your product specification and estimating the exact cost of a trading app
- going through all stages of the software development, keeping constant communication.
Our professional team makes a point of maintaining continuous support and committing ourselves to long-term cooperation.
Businesses have to adopt technology to remain competitive in the modern market, and the finance sphere is no exception. In the case of existing trading businesses, it can be implemented by developing a mobile application to broaden your customer base.
To build a trading platform, you need an in-depth understanding of user demands and internal processes. Choosing the right technology partner will help you create your app’s unique value, select the niche where your platform has a higher chance of succeeding, and pick features thoughtfully.