With today’s Internet landscape, everything can be done online. Everything lies at the tip of your fingers, be it work-related tasks like sending emails or attending Zoom meetings, entertainment like watching a movie or playing online games, or even stock trading.
Recent research indicates that the number of annual stock trading app users will reach 137.1 million in 2022, which is a staggering increase from the 28.9 million users recorded in 2017. This significant rise in the number of users is not surprising, given the traditional stock trading process that was much longer and complicated compared to online trading’s simplicity and convenience.
The market for stock trading apps has grown exponentially and is expected to reach around US $16266.1 million in 2023, with an impressive compound annual growth rate of 21.1%. This figure highlights the potential for growth and profitability in the field of online stock trading. The number has more than doubled from just around 12,000 fintech startups in 2019 to over 26,000 fintech startups globally, according to BCG, indicating the high demand for online stock trading platforms.
If you have had the idea of building a stock trading platform for a while but have yet to seriously consider it, this is your sign to get started. This article will provide you with everything that you need to know to stand out in the stock market app competition.
Before we dive straight into the topic of stock market app development, let’s quickly test what you already know regarding trading apps. Here is a quick and fun quiz to put your knowledge to the test.
A. To execute trades in financial markets
B. To manage personal finances
C. To create virtual reality simulations
The answer is A. Trading software is used to assist with virtual trading.
A. Withdrawal fees, management fees, and inactivity fees
B. Platform access fees, premium subscription fees, and trading fees
C. In-app purchase fees, advertisement fees, and borrowing fees
The answer is A. Different trading platforms charge for different kinds of specific transactions.
A. Marketing campaigns that promote the application
B. Selling the trading app
C. Payment for Order Flow (PFOF), transaction fees, subscription fees, in-app advertisement
The answer is C. Robinhood, a popular stock trading application that uses the PFOF model to generate revenue.
A. By implementing in-app advertisements for revenue generation
B. By offering users two versions of the application - a free one with basic features and a paid one with advanced features for premium subscribers
C. By charging withdrawal fees on the platform
The answer is B. Freemium models are popular ways to monetize your stock trading apps.
A. Real-time data, built-in risk management tools, and in-depth technical analysis access
B. Long and complex development process
C. Faster trading process
The answer is A. In addition to acting as a platform for one to trade stocks, trading apps often provide users with dashboards, push notifications, and news so users can make quick and informed decisions.
A. Automated trading, so there is little control over what is happening
B. Testing and simulation capabilities
C. Long and complex development process, data security, and regulatory compliance
The answer is C. As one of the sectors with the strictest regulations and the most sensitive data, the development process can be lengthy to ensure it is up to standard.
You should check out our detailed article on custom trading software development to read more on trading platforms in general: What they are, how to monetize them, and more.
Investopedia defines financial technology, or fintech, as the innovative technology designed to enhance and streamline the provision and utilization of financial services. Fintech is used to assist organizations, entrepreneurs, and customers in managing their financial operations, procedures, and lives more effectively.
Belonging to the fintech sphere, this is also how stock trading apps work. Share trading apps are end-user platforms that aim to help users automate and improve the delivery of financial services. Typically, the app acts as a middleman, connecting investors with brokerage firms, which then find a counterpart to play the opposite side of the trade.
With the use of technology, not only do users have access to the stock trading market at the tip of their fingers, but they can also handle their finances with ease. There are several variants one can choose from when you build a stock trading app.
Always know your target audience. When you create a stock trading app, think about your audience’s preferences. Does your audience enjoy mobile or web platforms? Do they prefer Google Assistant or Amazon’s Alexa?
This is not to say that you need to cover every platform possible - but to slow down and seriously take the user’s preference into perspective.
Mobile trading apps are a great choice due to their convenience and accessibility. Individual investors are often the target audience for this kind of stock trading app. Core features like real-time market data, push notifications, and a customizable dashboard with the latest news are a must if you want to catch the attention of day traders and investors.
When it comes to the large volume professional traders need to handle daily, a web platform would be the best choice. As long as there is a stable Internet connection, traders have access to complex charting tools, real-time news streams, and the latest technical analysis tools.
In order to build a successful stock trading app, one needs to learn from the leading players in the market. Let’s take a quick look at them.
Cyber security should be at the forefront of every development project, and even more so since stock trading applications deal with a lot of sensitive user data. According to the State of Authentication in the Finance Industry 2022, 80% of the surveyed companies experienced a security breach due to weak authentication. When it came to system and service authentication and access for financial institutions, 63% of the compromised firms took no action to modify their security procedures.
We will guide you through the process of stock trading application development, largely focusing on how you can tackle potential security threats.
This is where all the planning gets done before the actual development phase. This is when you will
Even though the financial services industry is one with strict rules and regulations, it is also a prime target for cyber attacks. Here are some measures you can take to protect your fintech app.
Prevent unauthorized access by using two forms of identification. Give users and businesses the ability to add their Face ID, emails, phone numbers, and fingerprints to safeguard their data.
Data encryption is a crucial security methodology that aims to protect sensitive information by converting it into a code only accessed by authorized individuals. With encryption algorithms like HTTPS, data can be securely transferred and stored, minimizing the risk of unauthorized access and data breaches.
Cyber threats are ever-evolving, so make sure the security team is constantly updating the codebase to keep the app secure. Common security practices like SQL injection, XML external entities, cross-site scripting, etc., should also be implemented.
For investment software development, you can look into APEX Clearing, Alpaca, Interactive Brokers, and DriveWealth APIs
These APIs offer features such as fractional trading, pre-market & after-hours trading, portfolio management, margin trading, advanced orders, etc.
All trading APIs provide real-time market data, secure multi-factor authentication, and support for business accounts.
It is time to organize your development team; you can either recruit an in-house team or outsource a credible one like Orient Software.
During the development phase, you need to choose the right tech stack. Choosing the right tech stack is what creates a winning app. Again, if you are building a custom stock trading app, it is best to consult experts on the matter.
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