Online stock trading has been around for several years and still remains a hot trend. The reason of such persistent popularity is its appeal to the inherent human desire to get rich without an effort, or, in this particular case, to take a little risk in exchange for a potential profit. Though users’ benefit is subject to a multitude of factors that influence their trading outcome, it is a sure fact that dedicated software for this activity may be quite lucrative under some circumstances. Let’s review the skills and means required to build a stock trading application like Robinhood, TradeHero, M1 Finance and many others.
- Key Features of a Stock Trading App like Robinhood
- What Does It Cost to Create a Trading Robinhood-Like App?
- How Robinhood Makes Money?
Key Features of a Stock Trading App like Robinhood
Though various applications for stock trading like Robinhood offer distinct sets of features, some of these perks and advantages are generally valued by users more than others. It is wise to review as many features as possible since this information will prove to be invaluable at later stages of development planning.
Your aspirations to start a free trading app like Robinhood may surely be ambitious, but do not allow your assertiveness turn into a delusion of grandeur and ruin the whole enterprise. Be realistic and keep in mind that you won’t be able to cover all the user needs and provide every possible functionality in one app. That’s why it is important to study the following aspects and focus on the most demanded, effective and potentially profitable.
The order of the following features and development principles does not reflect their relative importance, with several exceptions. Some users seek certain characteristics in a stock trading application, while others value completely different perks. Though it is impossible to include everyone in your target audience, there are several universally required functions, which are listed and briefly reviewed below:
Account and trade protection
The overwhelming majority of users, regardless of their computer skills, have concerns over security, especially during finance-related online activities. That’s why the most important and difficult task for developers is to persuade the audience that the software is safe and reliable in every possible aspect. Though every added security measure will increase the cost of a stock trading app like Robinhood, it is never wise to scrimp on safety.
To gain the audience’s trust, make sure that you provide at least several methods to protect the user data, such as multi-factor authorization, advanced encryption algorithms, suspicious activity monitoring, including sudden or unusual change of the user’s location, or repeated failed attempts to log in. Also, make sure that your servers are sufficiently protected from DDoS or brute-force attacks, software vulnerabilities, and other exploits.
To secure user trades, consider cooperation with respected financial regulators, such as FINRA, SIPC, or other authorized companies with the purpose of protecting customers’ assets.
Orientation on both savvy and novice traders
While starting a Robinhood-like stock trading application, aim at preferably wider user coverage in order to maximize your target audience and increase potential profits. For this purpose, make sure your software does not demand specific technical or financial skills and knowledge. A great way to attract inexperienced users is by offering a clear yet thorough tutorial, including a step-by-step guide or a manual with the FAQ section.
Modular structure and integration possibility
In order to further accommodate various types of users and functions, it is advisable to contemplate a modular structure of your stock trading application. This way, you can combine features into functional blocks, ensure easier access and better usability. This type of app’s design further promotes various monetization plans based on availability of different features, which will be described later in more details. In addition, a modular structure allows creating several versions of the app with the limited or “more focused” functionality. For instance, you may make an app like Robinhood for cryptocurrency or CFD trading.
Here are several examples of essential functionalities that should be implemented as separate, possibly paid, modules in your investing app:
- a user account area with profile data and history, personal settings management, a dashboard, and other task management functionality. For mobile versions, this area may also have partial integration with your Google or Apple account. For example, if you plan to create an Android trading app like Robinhood, consider the possibility of data synchronization with Google Calendar, as long as it is secure;
- a trading module with buy and sell functions, a cornerstone of your software with an intuitive and responsive design that allows simple and straightforward operation. It can be advantageously combined with means to check bids and deposits, monitor transactions and receive payments in at least several available forms listed below;
- a real-time stock market tracking and logging module that collects and displays relevant financial data, including price fluctuations, in the form of graphs, chart pies, candlestick charts, and others. This can be further enhanced by various filters, search and sorting capabilities;
- a news module offering relevant daily information on relevant topics, such as stock markets, external factors that influence market prices, etc. To do this, the developers should think through seamless integration with online newspapers and other media channels. It would be useful to combine this information with daily tips from expert analysts, but that involves additional cooperation with third-party analysts and implies an extra fee;
- a simulation module that provides a virtual environment for investors to test their skills and get a grasp of online stock trading without risking their money. Preferably, it should be linked to a tutorial or at least a glossary to make it more attractive for entry-level users;
- a notification module configured to ensure several ways of sending update messages to a user when preset conditions are met, such as a price reaching a set threshold. These messages may be communicated via SMS service, e-mail, push-up notifications in mobile apps, etc.;
- a communication module in order to support user communication, feedback and other information sharing via direct messages or in public or private channels to ensure various degrees of confidentiality.
Intuitive and convenient UI/UX design
After you have picked the number of functions and features to be implemented in your software, the next step of your plan to develop an app like Robinhood is the design development. This process aims at offering the most optimal UX/UI taking into account specifications of various modules, hardware platforms or operating systems. This is a challenging task that requires a well-thought choice of various development technologies: languages, APIs, frameworks, protocols, data formats, etc. Naturally, some of them are better suited for specific tasks than others, so the development of mobile and web versions may demand different tools.
As one illustrative example, the development of one trading application may require Python for backend, AngularJS for frontend, Swift for iOS and Kotlin for Android. In its turn, this requires additional work and coordination, as well as many available developers, and increases the overall cost of an investing app like Robinhood. Moreover, sometimes you will have to outsource parts of your project if you don’t have available specialists on the required optimal technology; this also adds costs.
Reliable ways to redeem your profits
The stock investment software should allow its users to monetize their revenues in a secure and preferably effortless way. In order to attract more users, the developers should provide for several ways of transferring funds to and from trading accounts. In optimal scenarios, your app should support bank transfers and worldwide payment systems, such as Mastercard or Visa, online services like Paypal, Amazon Payments or Dwolla, and the possibility of cash withdrawals. However, if you plan to build an app like Robinhood for cryptocurrency trading, it is naturally required to allow their use as well. Since the mobile application must be optimized for smartphones, the integration with Google Wallet/Checkout and Apple Pay is essential.
Several monetization plans and a commission-free principle
Let’s talk about the dilemma of making your software profitable while remaining attractive even for stingy users. In order to make your application available to everyone, keep it free, but under premises of additional paid options that extend its functionality, such as:
- Advanced statistics and market history;
- Longer trade duration, in addition to usual quick trades;
- Virtual training in a simulated environment;
- News and tips from expert analytics;
- Customized notifications via selected communication channels;
- VIP customer service assistance available 24/7, and others.
This way, you will cover the largest audience immediately starting from the launch of your app, and gain profits from users who need more than core functions and are willing to pay for advanced features.
Another charitable perk that is widely accepted by developers as a basic principle to create a trading Robinhood-like application is the commission-free operation. That is, the authors do not take any commissions from any trades performed via their online investment service, but instead reach to a larger audience. However, you may contemplate charging interests based on the amount of funds on user accounts. Thus said, the choice and development of a business model for your software are rather challenging, and require thorough planning. For that reason, they will be further discussed in one of the subsequent sections.
“Mobile first” development priority
In your determination to make a free stock trading app like Robinhood you should definitely target mobile devices as your priority platform. This strategy has plenty of advantages that promote usability and potential profits of your software. First of all, mobile applications can be used anywhere, at any convenient time and do not require a dedicated workplace with a desktop computer. This significant benefit makes them more preferable for a larger number of active users and offers a great potential for increasing the number of app downloads and overall availability of your stock trading software.
Moreover, mobile apps benefit from various mobile ad formats, thus, enhancing monetization possibilities while retaining an essentially free-to-use and commissionless business model. Modular structures with paid add-ons or the possibility to unlock advanced functions also work extremely well for both Android and iOS software. In addition, modern smartphones enable additional security measures, such as fingerprint or face authorization. However, while focusing on mobile platforms, don’t disregard other audiences and also develop a web application.
What Does It Cost to Create a Trading Robinhood-Like App?
As you may guess, the chosen number of the aforementioned features and technologies directly affects the cost to build a stock trading app. The more advanced your app is, the more man-hours it requires for developing and testing. This includes every separate feature, supported platform or extra functional module. Moreover, the necessity to outsource some steps of the development process also increases the total expenses. With this regard, keep in mind that developers in the USA or Western Europe charge more than their business rivals from Eastern Europe or Asia, and their rates also vary depending on their skills and experience. However, if you are interested in exact numbers regarding cost and time needed to design an app like Robinhood, contact our sales department, and we will estimate the expenditures according to your requirements.
How Robinhood Makes Money?
Robinhood maintains an efficient monetization model by eliminating the need for office and staff, as well as large-scale promotional events, thus, saving significant money. Besides, there is a paid “Gold” version of this software, which offers advanced features as compared to the free app. You may borrow this particular model, modify it at your discretion, or employ a different method of monetization. Let’s review some variants with their potential advantages and drawbacks. This information will aid your plans and estimations to make a free stock trading app like Robinhood.
As was mentioned above, the modular structure of the application that offers additional functionality is one of the most effective and straightforward ways of making your software product profitable. Besides, this approach is very clear for users and not as annoying as displaying ads. It is fair that advanced features and additional possibilities require an extra fee to unlock them, and it leaves users the choice options.
Additionally or as an alternative, you may offer a subscription for VIP customer service available 24 hours a day, or a subscription for an ad-free experience. The fees may be charged weekly/monthly, etc. and calculated accordingly, with the option of a one-time payment to enable the desired functionality or service permanently instead of recurring charges. Be sure to provide for various available payment methods, for example, support for Apple Pay if you make a stock trading app like Robinhood for iOS.
Advertising is one of the most widespread ways of free service monetization and works exceptionally well for mobile platforms, though web-based applications may also utilize this model. Partnership with ad networks may be extremely lucrative for developers, and a source of nuisance for users as well. Advertisements may be integrated into your software in various forms, from traditional banners, videos or interstitial ads to some native formats. In order to make a free stock trading app like Robinhood, consider cooperation with the major parties in the ad industry, such as:
- Google’s AdMob;
- Facebook and Instagram Ads;
- Twitter Ads;
Last but not least, there is an obvious option for making profits: to charge commissions for every trade performed via your app. While it may be the source of revenues for your service, its drawbacks negate the potential benefits almost completely. First of all, it would be extremely difficult to compete with rival investment apps that offer commission-free trading. In addition, this approach significantly narrows your target audience. Particularly, it may scare away inexperienced users who want to try stock trading, since this model is not friendly to beginners.
A few final words regarding trading application development
The list of features and requirements, described above, proves that developing a free stock trading application is a difficult task that consumes a lot of time, labor and funds. Moreover, the field of online trading is a highly competitive one; thus, make sure you have an ace up your sleeve – an undeniable advantage to beat the rivals. This can be an optimized monetization model, more appealing terms for traders, a more intuitive interface to invest in stocks, advanced security measures to protect accounts and assets, etc.
If you decided to take up this endeavor, keep in mind that you will need a large team of diverse specialists in such areas as development, testing, and support. However, provided you have a reasonable strategy, the outcome will bring you profit and fame among both customers and colleagues.