Where there\u2019s a market rush, there\u2019s an opportunity to create an investment app. Millennials are reportedly ready to invest, whereas almost half of their income stays in checking and savings accounts. The crowd-investing market is expected to reach USD $7 billion<\/a> in transaction value by 2022. The investment industry still offers an ocean of opportunities to introduce user-friendly features and innovative solutions.<\/p>\n\n\n\n This article aims to answer the essential questions: how do these apps work and generate revenue, how to create an investing app step by step, and how much it may cost.<\/p>\n\n\n\n Novice investors rarely have much money to start. Micro-investing apps solve this dilemma by connecting to a user\u2019s debit card and rounding up their purchases. For example, a user\u2019s iced coffee price of $3.75 will be rounded up to $4. The extra quarter will be transferred to their investing account and funneled into a chosen portfolio of stocks.<\/p>\n\n\n\n The apps typically keep the amounts necessary for opening an account and investing at the minimum. The same for fees and commissions, if any.<\/p>\n\n\n\n Micro-investing apps offer a \u201cset it and forget it\u201d approach to continuous investing. The users typically buy exchange-traded funds (ETFs), virtually purchasing shares in dozens or even hundreds of companies. As a result, they don\u2019t have to closely follow the stock market, watch CNBC, or read The Wall Street Journal. <\/p>\n\n\n\n All of this makes micro-investing apps great for:<\/p>\n\n\n\n If you are interested in micro investing platform development, it\u2019s essential to study the leaders\u2019 products. You may discover opportunities and features worth incorporating into your solution.<\/p>\n\n\n\n Founded in 2012, Acorns is one of the micro-investing pioneers. In 2015, the platform extended to Australia, and in 2018, Acorns Australia rebranded as Raiz Invest.<\/p>\n\n\n\n Designed primarily for millennials, Acorns offers users two ways to start investing easily:<\/p>\n\n\n\n Acorns also partners with hundreds of retailers so that the cashback can be reinvested automatically.<\/p>\n\n\n\n Users don\u2019t have to choose exactly where to invest. When their profile is created, they answer several questions and state their goals. Based on their age, risk tolerance, and income, the system compiles their investment portfolio from different stocks and bonds, ranging from conservative to aggressive.<\/p>\n\n\n\n Only $5 is required to open an account. There are three tiers of monthly portfolio management fees:<\/p>\n\n\n\n Acorns will waive the fee if the balance is zero, but once it exceeds $5,000, they will collect 0.25% of the balance per year.<\/p>\n\n\n\n Acorns generated $71 million<\/a> in revenue in 2020 and expects to earn $126 million this year. The company is currently valued at $2.2 billion<\/a>.<\/p>\n\n\n\n Unlike Acorns and Stash, Robinhood allows users to trade full stocks, options, and cryptocurrency. Robinhood doesn\u2019t advise users on their portfolio, but they can see the average share price investors bought stocks at and their current prices, related stocks bought by other investors, stock ratings by analysts, earnings information, and general stock market news.<\/p>\n\n\n\n There are no account maintenance fees. The premium service, Robinhood Gold, for $5\/month also enables users to borrow money to buy stocks. (If you wish to\u00a0build an investment app\u00a0similar to Robinhood, you can find more information about its revenue model, features, and design in our\u00a0recent article<\/a>.)<\/p>\n\n\n\n Last year, Robinhood\u2019s revenue approached $959 million<\/a>, up 245% from 2019. In July 2021, the company\u2019s shares started trading, selling 55 million shares in its company via an initial public offering on the first day raising $2.1 billion. Currently, it is valued at $32 billion<\/a>. <\/p>\n\n\n\n Founded in 2015, Stash is the youngest player on our mini-list. Also allowing investing with just $5 without any trading fees or commissions, Stash is differentiated by the greater flexibility and control users have over their investments.<\/p>\n\n\n\n User accounts fall into three categories: conservative, moderate, and aggressive risk profiles. Stash advises users to read their investors\u2019 guide before making any decisions. Theoretically, 3,000+ stocks and ETFs are available, but Stash uses preliminary surveys to curate and categorize the most suitable assets for each user. They can decide in which services, products, causes, and companies to invest: software development, legal cannabis farms, or whatever aligns with their beliefs, interests, and goals. Users can read more about each company and assess their risk level.<\/p>\n\n\n\n Users can connect the app with their bank account and specify the amounts to withdraw weekly or monthly to invest in their portfolio, which they can check and modify as often as they like.<\/p>\n\n\n\n Stash offers three plans:<\/p>\n\n\n\n Stash saw record growth in 2020. Now, with over 5M customers and $2.5 billion in assets under management, its valuation is estimated at $1.4 billion<\/a>. <\/p>\n\n\n\n It\u2019s super important to understand the competitors\u2019 monetization strategies and alternatives: it should help you in developing your own.<\/p>\n\n\n\n Four monetization methods are popular with micro-investing apps currently:<\/p>\n\n\n\n Digital advertising is easy to set up and implement, but too much advertising, especially irrelevant ads, can negatively affect your app experience and thus usage, engagement, and customer retention \u2014 all critical metrics for a startup.<\/p>\n\n\n\n You may charge customers monthly or annually, possibly for using different services as Stash does. It\u2019s highly recommended to offer a free trial period, which can range from weeks to months. Having fully appreciated the app and being hooked on it, people would opt for a paid subscription eagerly.<\/p>\n\n\n\n This approach implies that users can enjoy most of an app\u2019s functionality for free and pay for premium features if they want more. For instance, once your users have developed a taste for investing, you can allow trading on margin like Robinhood or offer features that promote better-informed buying decisions.<\/p>\n\n\n\n The commissions from affiliate programs are suitable as additional income. It\u2019s advisable to select the hottest products among the suggested and look for relevant businesses your mobile investment app can promote.<\/p>\n\n\n\n Most micro-investment apps employ hybrid monetization models including specialized methods. For example, they may charge:<\/p>\n\n\n\n The components of your future revenue model will depend on what services your micro investment platform offers. It\u2019s time to talk about its features.<\/p>\n\n\n\n It\u2019s recommended to engage a financial planner, lawyer, business analyst, and other experts right at\u00a0this stage<\/a>.<\/p>\n\n\n\n You will need to study, analyze, and evaluate:<\/p>\n\n\n\n This research will help you find a niche, devise a unique selling proposition, figure out the future app\u2019s must-have and nice-to-have features and ways to monetize them, and decide on the primary OS or both.<\/p>\n\n\n\n It\u2019s advisable to plan your business pattern early: portfolio variety, the ETFs you want to use, minimum account balance, fees, commissions, plans, discounts, etc.<\/p>\n\n\n\n NB.<\/strong> Along with the technical challenges of fintech investing app development, be prepared to face significantly challenging organizational issues such as:<\/p>\n\n\n\n It will be most reasonable and cost-effective to\u00a0build a micro investing app\u2019s basic version first. A\u00a0minimum viable product<\/a>\u00a0lets startups validate the idea, assess the demand, and receive user feedback early. If the response is negative, you will be able to pivot quickly or close the project without losing much money. If positive, you can continue, enhancing and adding functionalities.<\/p>\n\n\n\n The MVP is limited to the features that satisfy the users\u2019 primary needs and help differentiate it from the competition. The following are considered essential to investment app development:<\/p>\n\n\n\n To stand out from the crowd of competitors, you need to include better features, innovations, and benefits right in the MVP. It may be helpful to develop some of the following:<\/p>\n\n\n\n Using these functional blocks or modules as foundations for paid features, you can create several versions of your app and offer free and paid subscriptions. <\/p>\n\n\n\n Here are some more ideas to reinforce your unique value proposition:<\/p>\n\n\n\n Remember that you also will need an admin panel for managing users and their actions.<\/p>\n\n\n\n Besides the lists and descriptions of the selected features, you need to describe how the app will perform tasks for the users. You may sketch the screens, develop the app\u2019s maps, or even create a clickable prototype<\/a>. <\/p>\n\n\n\n Having your research results and\u00a0documented requirements<\/a>, professional software developers will be able to suggest a technical solution and estimate the budget.<\/p>\n\n\n\n You can either recruit an in-house development team or delegate the job to a dedicated team located elsewhere. The latter approach offers several\u00a0benefits<\/a>\u00a0significant to startups, but in any case, you will need to\u00a0hire specialists<\/a>\u00a0to fill at least the following positions:<\/p>\n\n\n\n One advantage of dedicated teams is that you won\u2019t have to search for, screen, interview, and hire each specialist. Your outsourcing partner will provide you with a whole team experienced in fintech investing app development and working well together.<\/p>\n\n\n\n Moreover,\u00a0offshore outsourcing<\/a>\u00a0may help you save half of a project budget without compromising quality.<\/p>\n\n\n\n Once your mobile app has been released, got a user base, or even generated profit, an in-house team can\u00a0safely take it over<\/a>\u00a0to maintain and improve under your watchful eye.<\/p>\n\n\n\n Safety, security, and compliance with national and international financial industry regulations pose some of the greatest challenges to fintech investing app development. <\/p>\n\n\n\n For example, if you develop a mobile investing app for the European market, it has to comply with the General Data Protection Regulation (GDPR).<\/p>\n\n\n\n In the USA, broker-dealers are regulated by the SEC (Securities and Exchange Commission), the FINRA (Financial Industry Regulatory Authority), and other federal commissions, boards, and bureaus, as well as each state\u2019s stock-broker regulations. The apps should also meet the Know Your Customer (KYC), Anti-Money Laundering (AML), and Customer Identification Programs (CIP) requirements. <\/p>\n\n\n\nHow Micro Investing Mobile Apps Work<\/strong><\/h2>\n\n\n\n
Leading Micro-Investing Apps in the US<\/strong><\/h2>\n\n\n\n
Acorns<\/strong><\/a><\/h3>\n\n\n\n
Robinhood<\/strong><\/a><\/h3>\n\n\n\n
Stash<\/strong><\/a><\/h3>\n\n\n\n
Monetization Strategies of Micro-Investing Mobile Apps<\/strong><\/h2>\n\n\n\n
Advertising<\/strong><\/h3>\n\n\n\n
Premium subscriptions<\/strong><\/h3>\n\n\n\n
Freemium<\/strong><\/h3>\n\n\n\n
Affiliate programs<\/strong><\/h3>\n\n\n\n
Basic Steps to Create an Investment App<\/h2>\n\n\n\n
1. Research and ideation<\/strong><\/h3>\n\n\n\n
2. Select your app\u2019s features<\/strong><\/h3>\n\n\n\n
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<\/figure>\n\n\n\n3. Engage a reliable tech team<\/strong><\/h3>\n\n\n\n
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4. Address the safety and compliance issues in advance<\/strong><\/h3>\n\n\n\n
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