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Creating an Investment Platforms: Tips and Tricks

This article about how to build an investment platform is written by Iryna Meshchankina — QA Lead at Django Stars.
Read original article on Django Stars blog.

Investment advising is something we’ve all heard of — you find a trustworthy company, you sign a contract, you get advice on how to better invest your money.

But what used to be done in offices just recently, is moving into the mobile world with an astonishing speed. No surprise there — with so many aspects of our lives already gone online (smart homes, pet entertainment, weight control, you name it!) it was just a matter of time until investment companies shifted their focus to online wealth management platforms as well. This is a global trend that is part of the dramatic growth process of fintech. Only in U.K., Statista notes the following growth of online banking and others services.

Growth of online banking and other financial operations in U.K.

Note that the platforms aren’t entirely autonomous and the analysis is still run by advisors, but the process has become a lot faster and more flexible.

Online advising develops at a different pace depending on the country and its financial tradition. Countries with investments easily accessible to a wide audience and no minimum investment (or this threshold is reachable for an average person) have the most developed online investment platforms. For example, in the US, you can start investing with as little as $50, as well as there are numerous options for individual investors to buy stocks. This results in 54 millions of active individual investors according to Forbes.

Image source: Forbes

Not every country is like this though. Many countries are yet to reach this stage. However, there are a couple of countries other than US that have loyal legislation for fintech products. Which means that before you start working on your platform you have to be sure about the situation on the market, so your platform can function properly and more importantly pays off.

Remember that this isn’t the only thing you should consider when developing an investment platform. Here’s a list of advice we compiled based on our own experiences.

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Investment Management Platform Basics

Generally, all investment platforms look the same. Customers open the website, register and fill in their information. Further on, they follow these steps.

This data allows to determine asset classes and markets that are most fitting for this particular customer, be it real estate, materials, or something else. As soon as everything is set, the system does regular health checks on the user’s investment portfolio by matching investment results with the set goals. This way, users can get suggestions on whether it’s profitable to keep investing or if it’s better to pull out and wait.

Important Parts of the Development Process

Okay, let’s start. The project that we will draw our advice from is a B2C-oriented investment service.

#1: Architecture

Not all of the clients know their target audience right away, so you might have to build the architecture part by part. Some may turn out unusable and have to be refactored later on. It’s possible, but very tricky: when changing one element, you risk affecting another one that should remain unchanged.

That is why, you need to decide on who your target audience is — this will define the architecture of the platform depending on whether is B2B or B2C. Note that B2B is much more complicated and branched out.

As a matter of fact, the platform isn’t completely automated.Thus, we created panels through which advisors can update investment funds lists, do risk assessment, calculate a client’s score based on income, credit history, and determine what’s the best way to invest and if it’s worth it at all.

#2: Bank Integration

Based on their bank data (credit score, reliability, etc.), customers get suggestions concerning their investments. Which is why, the service needs arrangements with banks. Also, bank connections allow to integrate exchange rates into the platform.

It’s important to decide how many banks you will connect with, as it’s vital for the architecture too.

#3: Country and Time Zone

Carefully consider the location of the integrated banks. Laws and regulations may vary, as well as operating hours. But here’s a tip: if a user requests information on a holiday, the data can be extracted from the most recent updates. This way, you can make these little inconveniences invisible to the customers. For example, if they make an investment inquiry on Saturday, they will get investment rates from Friday

#4: Code Logging

To fix or prevent an error, you need to know what caused it. We, for instance, created a tool for error logging that logged all our enquiries to the third party (i.e. the bank), as well their responses. This way, every error was shown on the log list.

#5: Sandbox Environment

A sandbox environment is an exact copy of the third party function set connected to the developed code without risking client data.

When choosing a bank to work with, check if they have it, so you don’t risk losing or corrupting any client information and avoid unwanted charges. And when you’re done coding, you simply replace the sandbox URL with a real one, and you’re ready to go.

#6: Development Flow

Look at your platform from a customer’s perspective. Registration, background check, choice of market, and the investment itself.

Example of the registration form

Leave some space for a getaway in case the money doesn’t go through right away, and exchange rates change the day after. To do so, you can restrict investment portfolio usage — this way, a certain amount of user’s assets remains available at all times, in case of unexpected exchange rate changes or transfer fees.

Suggestions on assets distribution

Install notifications for the service app to interact with customers. This way, they won’t have to check the website all the time for stock market status. If there’s a good opportunity to sell or buy something, the app will send a notification.

#7: Matching UX

Don’t forget that you’ll have to squeeze in large amounts of data and large table sheets into small screens. It may get especially tricky with mobile devices due to their size.

End users may have little to no knowledge about investments, or about some of the platform functions or fields. You can help your clients by sending them notifications and tips, but be careful as to not to overload in the interface.

Be careful when using several languages. Some languages tend to have longer words and sentences — for instance, English words on average are shorter compared to most other European languages.

Read More About UI/UX of Fintech Products:

Things We’ve Learned From Developing an Investment Platform

Sharing is caring, which is why we’d love to share all the useful things we’ve learned in the process of developing an investment platform. After the seven crucial elements of an investment platform, here come seven pieces of advice for smoother investment platform development.

  1. To build a wealth management platform, hire developers with previous experience in the domain of investments.
  2. To make the process more efficient, the data provided to developers must be written down in formulas with specific examples. Requirements, however, should be written down in both professional and simple language.
  3. Formulas and algorithms used to calculate investor reliability coefficients, client risks — time of deposit, primary investments, and so on, should be as simple and logical as possible. Or better yet, with examples.
  4. Don’t let other developers reuse your code. Every case is unique like a snowflake, thus, every code should be written from scratch.
  5. Everyone has to be on the same page about everything. Use a dictionary, conduct workshops to figure out vocabulary, business processes, etc.
  6. Don’t be afraid to spend money of testing. All the formulas that calculate investment risks, distribute the portfolio, etc. need testing. Sometimes, a formula that works perfectly on paper, just doesn’t feel right in code. And trust me when I say, working code will be worth your while, even if you spend a lot of resources on testing.

That’s about it. Some things may sound obvious at first, but it’s always better to be overcautious, rather than miss something. And remember, you’re creating a service that should be understandable for every single client, even the least knowledgeable in investments. Which is why you have make sure all processes run smoothly, and every little feature works flawlessly, for you and for your clients.

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