Building an Investment Platform: Our Advice

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Yuliia Melnik Copywriter

In the face of digitalization and the pandemic’s impact on business workflows, the investment industry’s focus has shifted to online platforms. They allow wealth to grow, and customers understand it. In Australia alone, the investment platform market was US$680 billion in the first half of 2020, with positive growth of 8 percent in the quarter.  

This trend is global and clear for fintech companies and startups. Today, competing platforms are actively being built by independent providers.  

Therefore, it is worth trying to develop your product, and we’ll tell you how to do it. This article will give you an overview of the principles of online systems, how they function, the basic features required, and how to create an investment platform and its development costs.  

Short Overview of the Online Investment Market Statistics  

Online investments are growing strong. For instance, in UK, Statista notes the rise of digital banking and other services. The share of people using internet banking in Great Britain in 2020 has reached 76 percent, compared with 30 percent in 2007.  

The dynamics of Great Britain provide the best illustration for what is happening all over the world: 

The rest of Europe demonstrates the same widespread distribution of online investments, especially in Nordic countries, where online investment services penetration rates are over 90 percent. The statistics illustrate that digital banking is now a primary method of payment in the EU; meanwhile, the use of physical cash has reduced, a phenomenon that is noticeable, for example, in Austria and Germany.   

There are numerous online systems for investors in the U.S. According to Forbes, they have 54 million active users. Pew Research Center surveys show that 51 percent of U.S. adults bank online. It is expected that the annual value of digital payments will reach US$726 billion at the end of 2020, and the volume of payment transactions via wearables will be worth US$500 billion in 2021. 

Principles of the Investment Platforms   

In fact, all investment platforms are similar in their building and working principles. All operations are carried out in a web environment or mobile application.  

Such platforms are services that allow users to make investments, sell investments, and hold funds. In the case of traditional buying investments, you can’t cut out expenses for the qualified adviser. But with a platform, it is easy to conduct your investment activities in the online environment, which essentially works as a one-stop-shop, saving you money on the services of middlemen.  

Another advantage of such systems is easy–to–access investments. Wealth management platforms take the interaction between participants to a significantly higher level. Users can access investment management and consultations easily. The systems simplify the process of investing and may provide funds at a discounted rate. 

Another advantage is their simple working principle. For a customer, it comes down to several stages: 

There are two types of platforms: the first one allows users to decide on the specific investments, and the second one creates a portfolio or wraps investments together. The systems usually offer several choices: 

• Shares — investments made in enterprises and companies; 
• Bonds and gilts— assets that prove lending to an organization or government; and 
• Funds that pool shares, bonds, or both.  

It’s possible to invest via a D2C (direct to customer) platform or one with a financial adviser feature. In many cases, you can hold the investments purchased in the system. 

Basic Features Required for a Successful Investment Platform   

Personal account  

In most cases, there are several types of accounts in the platform: admin, allocator, advisor, client, and other. Because such systems operate with finance, access must be secured with two-factor identification, passwords, or Touch ID. We are not limited to this and offer our clients reliable software protection with Face Recognition login.  

In account, the client and, if permission is provided, his adviser can view daily commentary, activity, and currency options. The system must maintain a trading history for analysis, and data should be available in a single environment. The personal profile account can include share dealing, fund dealing, and other sections.  

Investment portfolio 

The investment platform should allow for the creation of as many portfolios as customers need, an aspect which is sometimes forgotten. Management options must be available to the owner or an advisor who works with the client and monitors, checks, and confirms his actions. 

In most cases, before accessing a portfolio, the customer has to determine a target risk level. Separation helps to create a balanced ratio of venture capital to reliable assets to prevent financial losses. In modern online systems, indicators that require in-depth analysis are determined using data science, artificial intelligence (AI), and machine learning (ML)  technologies that enhance decision-making and improve efficiency.  

If an advisor is provided, it is recommended to authorize his access to the client’s portfolio. ORIAS (Organization of the Insurance Intermediaries Register) code or similar identification will protect the client’s assets from outsiders. 

Assets management and search  

The assets management section must provide a filtered search using specific criteria to compare and select funds and review them in the results table. Recommended functions are the following: 

• Performance reports creation to give customers real-time access to investment and visual statistics; 
• Restricted investment portfolio usage to ensure that a certain amount of assets remains available in case of exchange rate changes or transfer fees; 
• Notifications for the service and customers’ interaction so that clients don’t need to check the market status regularly to take advantage of the opportunity to buy or sell assets profitably; 
• Automated alerts that help users respond to market changes immediately to mitigate areas of potential risk; and 
• Exclusive features such as advanced fund search, uniquely structured products, or equities and ETFs access that will favorably distinguish the platform from competitors. 

Admin panel  

Even the most advanced platform needs a “human touch,” which is why advisors are often operating these systems. They have an admin panel to communicate with customers and manage the core functions, such as investment funds list updating, risk assessment, and customer’s score calculation.  

Using the tool, advisors can determine the best way to invest and analyze the essential data like: 

• Earnings targets and annual profitability for the year; 
• Risks of capital loss and the average loss amount; 

• Risky and non-risky assets; and 
• Likelihood of reaching the goal by the stipulated deadline. 

Investments’ placing on a ring-fenced custodian account 

Investments made using the online system are usually placed in a ring-fenced dedicated account held with a custodian who is a separate entity (e.g., a bank). This is needed to prevent mixing customer and platform assets.  

A custodian helps protect the client’s assets from unauthorized use; therefore, it is necessary to provide safe transfer of funds to such an account when developing the system. We can use PCI DSS protocol, 3D Secure multistage data encryption, and similar technologies on your platform to help protect users’ savings from bank card fraud and phishing. 

Data security  

With the rise of cybercrime, data protection tools and money go hand in hand. When building a web and mobile investment platform, we at CHI Software use advanced encryption algorithms and authentication servers. We also check the authorization framework to ensure that sensitive data is secured to reduce the risks of hackers’ attacks. For web, desktop apps, and mobile devices, we use reliable tools and protocols.  

Here’s how, for example, the standard and widespread OAuth2 authorization flow is implemented: 

The user sends a request to the web-server to get access to the database (direct access is forbidden);

• The user follows the link to the provider, looks at the scope parameter, and activates the permission;
• The provider makes a redirect to the specified redirect_uri on the application domain with the parameters: provider’s user identifier (code) and state value for protection against CSRF and convenience;
• The authentication server provides an access token to verify it on the web-server.

The client requests a specific endpoint to receive the token, sending the client_id, client_secret, code, and redirect_uri for which the code was accepted. Neither the user nor the user-agent and client scripts see the real token for making API requests. Only the client and the provider know it, and safety is ensured. The authorization scheme allows third-party apps to access the information via an API and a one-time code that grants security.

Support 

Investors, financial and trading companies, and startups highly appreciate quality support. That’s why, if you create an investment platform, you should ensure technical, trade, and administrative assistance is available on request instantly.   

Phone and email support is a classic and mandatory format, but that alone is not enough. To provide high-quality and timely help, you have to provide a chatbot with a “smart assistant” based on AI. It is also worth providing a platform forum, traders’ social network, or other interactive tools for users to communicate with each other. 

Define value-centered features first: let’s discuss how to start your investment platform development! Contact us

Most Popular Online Investment Platforms List   

Fidelity Investments  

Fidelity is a trustworthy, well-rounded platform for research and long-term investments. It is a convenient tool for retirement planning. 

Key features: 

• Consumers’ trust — the platform was the winner of Investor’s Business Daily’s 2020 survey for its usability, execution of trades, and attractive terms; 
• Stocks, ETFs, mutual funds, fractional share, and more investment forms; 
• Brokerage, retirement, and other accounts are supported;  
• No minimum deposit, commission fees on stock, or options trades required; 
• A mobile application that works with Apple Watch and Google Assistant;  
• Unique account security system MyVoice detects and verifies the user’s voiceprint. 

E*Trade 

The system is valued for quick execution, a high-end mobile platform, and many research tools. Users can learn on the go and participate in ongoing education. The platform belongs to Morgan Stanley, which operates it as a separate unit. 

Key features: 

• An online platform that educates investors and provides webinars, news, and videos to users of all levels; 
• Helpful customer service, 24/7 phone/online chat support, and professional analysts for crafting the trading strategy; 
• No commissions for stock and ETF trades and USD 0.65 per options contract (USD0.50 if 30 or more transactions are made each quarter); 
• Advanced security measures such as encryption, two-factor authentication, and dedicated fraud protection teams.  

TD Ameritrade  

A large U.S. platform with an app that fits newbies and experts. Charles Schwab bought the system in 2020, and it is expected to merge with their service. 

Key features: 

• Wide range of investments — stocks, options, ETFs, bonds, etc.;  
• Standard, retirement, education, and other accounts; 
• No minimum deposit, commission for online stock, ETF, and options trades, or additional fees required; 
• Connection with Alexa-equipped devices that can be asked to operate stocks or get updates; 
• Reliable security system, including anomaly/intrusion detection and secure website that uses 128-bit encryption on all data transmission; 
• The educational content library — videos, webcasts, texts. 

Robinhood  

The famous mobile application that has earned its glowing reputation by offering free trades in almost any amount. The platform has an amazingly friendly interface and fee perks that brought the service success with a young audience with limited funds for investment. Since 2013, the platform has collected 13 million customers. 

Key features: 

• A sleek and easy-to-use mobile app with accessible language and easy-to-use customer service chat; 
• Commission-free trades in stocks and ETFs, and free options and crypto trading;  
• Customized news and notifications to control the investing flow; 
• The ability to adjust the iOS speech controller and to turn on or change Android’s text-to-speech output.  

Acorns  

Like Robinhood, Acorns is an app geared toward a mobile-friendly audience and beginners. The platform is convenient for passive investment with account contribution by recurring transfers, round-ups for purchases made with cards, and other creative options.   

Key features: 

• A gamified app that allows easy automated investing; 
• No minimum deposit required, USD1–3 fees per month (additional fees may apply); 
• Stock and bond ETFs investments;  
• Brokerage, retirement, and checking accounts;  
• Bank-level security — 256-bit encryption and two-factor authentication; 
• Investment recommendations based on user survey.  

Want to create an investment platform that will compete with these systems in a year? Schedule a free consultation with us: 

What Do You Need to Know to Start the Development Process?  

When building online investment platforms, it’s important to ensure the business’ legal and financial “purity” and study all the nuances of the regulations governing such activities in your chosen jurisdiction.  

Often it isn’t clear at first glance that a certification or a license is required to work. The permissions can be difficult to obtain in one country but easy in another. So, while selecting the target country, consider local fintech regulations: 

• The U.S.: The fintech industry’s regulation stipulates the need to follow the rules of the FTC and CFPB. These federal government agencies protect customers from deceptive fintech practices. If the wording in the rules for using the platform is vague or there are hidden conditions, the owner company will be fined, or its activities will be prohibited. 
• The UK: All investment platforms are regulated by the FCA and have to be an authorized and FCA-registered company. The regulator makes sure that systems adhere to rules about financial promotions and that business is conducted to the required standards. 
• The EU: Every fintech business must adhere to GDPR rules, even if there are no physical operations in the European Union. Companies must only work with personal data for a specific purpose and notify EU authorities about breaches within 72 hours. 

Every jurisdiction also has Anti–Money Laundering (AML) laws. They help detect suspicious activity (terrorist financing, securities fraud, etc.) and deter criminals by making it harder to hide ill-gotten money.  

It should be noted: Singapore, Australia, the UK, and some other countries have Regulatory Sandboxes. This is a testing space with temporarily adjusted regulations. With Regulatory Sandboxes, governments and banks help companies ensure they won’t become subject to rules. You can choose such a jurisdiction to train your skills.   

How to Create a Successful Online Investment Platform 

When you’re building an investment platform, you must turn to a team with experience in developing fintech solutions. Unlike many industries, this one requires a deep understanding of the complexities of technical implementation for features like how to make payments, protect money and personal data, manage the investment process, and more. 

If you want to design a useful online platform and/or app, it is recommended to hire a software development company specializing in fintech. Its analysts, engineers, and project managers are not intimidated by finance-industry jargon and are able to translate complicated terms into the language of technical implementation. When you design a fintech system with people who are already familiar with the process, you save time and money, and avoid misunderstandings and errors. 

Another benefit of a partnership with a professional investment platform development company is a streamlined workflow and attention to detail of the system creation. Let’s look at an overview of all the stages. 

Research and requirements defining 

To develop a custom investment platform, we must determine the business requirements according to the MVP approach that best suits your project. To formulate the system’s concept, leading competitors, and functions, you will need professional research, market analysis, and technical expertise. At this stage, it is important to find communication channels that fit both sides — Skype, specifications, etc. 

Platform’s architecture  

An appropriate recommendations package helps to identify unique features. We build the appropriate architecture that takes into account all the crucial factors, like: 

• Platform type and target audience. Systems architecture can widely differ, and as we at CHI Software know from experience, B2B solutions are often more complex and branched than B2C. So, if you don’t want to rebuild your platform, you first have to identify the audience. 
• Tools for advisors. Financial consultants are almost always involved and should be provided with an admin panel to communicate with customers. 
• Bank integration. The partner structures for the system are selected depending on the business goals and characteristics. But the platform must provide tools for safe, fast transactions. The architecture largely depends on bank numbers and data (customer’s credit score, reliability, etc.). 
• Time zones. The platform can be integrated with banks in different countries, and operating hours may vary. Due to the time gap, the data extracts from the actual updates, but not always the most recent ones. The customer makes a decision based on information provided during working hours, and it has to be stipulated in the platform rules and reflected in the architecture. 
• Access for all customers. Ensure that deaf or hard–of–hearing individuals can communicate and use TTY/TDD machines for calls. If your platform is a multi-language website or app (recommended), keep different text lengths in mind so that there are no layout problems.  

UI/UX design  

The UI/UX is also genuinely significant: it enhances user experience and increases retention. Considering that financial information displays on the screen as statistics and summaries, you will have to face design challenges when it comes to big guides and table sheets.  

We use a responsive approach to scale huge amounts of data to the screen size of customers’ devices. To translate bulky lists into the web and mobile view, we:  

• Define tables type — for example, F-shaped pattern (justified if the user needs to constantly read long lists) or material design for visual-spatial and hierarchical elements relationships; 
• Fix the rules for data unification so that lists, cards, and other forms of data presentation are uniform; 
• Think over filters and sorting — lists’ drop-down by click, lightboxes of settings, etc.; 
• Work through all the custom visual elements that are needed in the system. 

We also often include some user guides and hints with pop-ups and notifications, where end users may have advice about the meaning of forms or market fluctuations. But we never forget to strike a balance between giving enough information and overloading the interface.

Learn how to create an investment platform customer-driven prototype and how to make a detailed product blueprint at a low cost Contact us

Product development flow: the minimum viable product and MVP with improvements 

Every software development process goes through several stages: prototyping, MVP, product improvement, and release.  

We create the blueprint prototype of our solutions, test it, and design an MVP with the necessary minimum features. It allows us to find out what users want, analyze the audience’s pain points, and gather useful feedback.  

The minimum viable product has to include some important features. First, it is about code. Some programming languages fit for fintech development, like Python. It is considered as a right and flexible choice to adapt the product as you need. The server-side Python language is often used to develop machine learning, artificial intelligence, and big data solutions.  

But developers can choose JS, PHP, or other languages, depending on their needs. For instance, Java is platform-independent, while Python may not be suitable for specific mobile applications. JavaScript may be more convenient for IoT solutions, and Swift could be best for applications related to Apple. 

It’s crucial to ensure code logging to be able to determine what caused issues and prevent them. Errors would be shown in the log list, and technical experts will be ready to solve them.  

Read also: How you can use AI in fintech and benefit from it Read more

Another core point is security, which is incredibly meaningful to financial and payment solutions. To provide safe transactions, you can use tunneling protocols (PPTP, L2TP/IPsec, IKEv2, SSTP, Open VPN, etc.) or tokenization, where the PAN is replaced with a surrogate token value.  

One of the most effective ways to avoid fraud is with AI and ML-based detection systems, and we at CHI Software have a track record of successfully applying them. Artificial intelligence is also beneficial in: 

• Preventing money laundering — for instance, HSBC uses AI to identify fraud patterns and links between accounts, users, and related parties; 
• Analyzing the client’s behavior and buying habits — AI is complemented with big data and ML technologies; 
• Telephony support services — with speech recognition and synthesis, IVR voice menus reduce the call center load, and clients receive feedback quickly and resolve basic issues automatically. 

Another key feature is cloud integration. Cloud solutions are flexible, customers’ data is stored securely, and platforms successfully process operations in real-time. With CHI Software, you can choose AWS, Google, Microsoft Azure services, and others.  

Fintech highly depends on traditional institutions, relies on their data, and requires a lot of third-party integration. Better safety and risk reduction must process credit scores analysis, property valuation, etc. Numerous providers can be streamlined with a third-party API. This approach to investment platform development helps to ensure complete QA coverage and accessible providers adding. 

A case study example: 

We decided to use third-party API, certain web protocols to interact with providers (e. g., SOAP, REST, XML-RPS), and data access protocols (WASP, tokens, and others).  

The third-party provider returns data in a specific format that (usually) differs from that in the project. We standardize this data so the business layer can process it. It is also necessary to write a backend selector that works with certain data providers, depending on the environment.  

We also check that the third party has a sandbox — an environment for transparent code development and avoiding accidental user information corruption or unwanted charges. A sandbox is a copy of the third-party features set, and it connects to the code with no data risks. When the work is done, we can simply replace this URL with the proper one. 

When an investment platform’s MVP development is done, we can analyze future steps or even change the principal direction, depending on the project, budget, or client’s reaction. Here we make sure that customers’ actions to get results are clear, and we have covered all the possibilities. The MVP is a process, not a goal. You should search assumptions, find new ways to test them on customers, analyze the results, and make changes to the product if needed. 

QA, release, and maintenance  

Qualified QA services ensure that the entire lifecycle is covered with advanced testing. For defect tracking, test case management, costs and time reduction, the experts can use various manual and automated tools — for example, Test Rails, TestLink, Zephyr, Redmine, JMeter, SoapUI, Fiddler, Appium, and Wireshark.  

When your investment platform is successfully delivered and released, you’ll need customer support for it. As a reliable development company, we offer this option to clients as our integrity guarantee. Technical support can cover various services, like: 

• General system updates; 
• Adding and releasing new or updated system versions; 
• Program code maintenance; 
• Application security management; and 
• Functional and API testing. 

The online system has to evolve continuously, and new features must appear regularly. That’s why you need to add new demanded functionalities to the fullest extent and in the shortest time. Your platform’s website and mobile app should support the latest OS versions, function correctly across devices, and continually improve the user experience. 

The Estimated Cost of Developing an Investment Platform  

The full development and implementation costs depend on the complexity and scope of features, the technologies used, and the platform’s difficulties and capabilities. When budgeting, it is crucial to remember that investments in advanced technologies pay off many times over. The convenience, stability, and security of the platform will attract and keep many users. 

According to the Outsystems Survey, the development process timeline varies from three to six months for an application with basic features set to nine months or more for a complex project, such as an investment platform. The employees’ hourly rates depend on the location and specialization: 

The volume of expenses affects additional factors like website domain registration (the cost of which may vary from US$20 to US$100 or more). Website or app total prices may vary from US$20,000 to US$200,000. They are higher in North America and Western Europe, and lower in Eastern Europe, Asia, and India.  

Conclusion     

An investment platform is a large-scale system that requires the owner and the developer company to understand all internal processes and user needs. However, if you do everything right, your website and application will become a tool for generating meaningful income for you and your customers.  

Take the time to select functions thoughtfully, form business requirements, and develop and test the platform. It’s worth the effort: the pandemic has fundamentally changed the usual economic mechanisms. Many investors increased their share of cash and assets in anticipation of a recession at the end of 2019 and 2020. Now they are ready to use them. Online financial management has become a priority investment area, and the trading data capacity is expected to grow by 60 percent each year.  

Therefore, if you start building an investment platform now, you will receive a product that will lead you to the top of the field and remain relevant and in demand for a long time. We at CHI Software are standing by to help you with this. 

Get a free consultation and find out all about how to create an investment platform Contact us

About the author

Yuliia Melnik Copywriter