Investment app development has become a new trend in the financial world. Do you want to start your day with a latte and invest some money in your future at the same time? Micro-investing is a savvy practice that can help you do it. Micro-investing apps are a convenient solution that implies a set-it-and-forget-it approach and allows you to contribute to your budget continuously.
There is a lot of sense of why so many people around the world are using micro-investing apps. Connecting to your debit card, they round up purchases to the dollar and automatically transfer the spare change to your investing account. These small savings may seem insignificant at first glance, but they have a huge impact in the long run and can grow into a larger nest egg over time.
Illustration by Boyko
As traditional investment methods require a lot of effort and savings, micro-investment is all about growing a financial portfolio with a small amount of investment.
According to GlobeNewswire, the global micro-investing apps market is forecast to increase from a value of US$19 billion in 2023 to US$36.1 billion by the end of 2030. The main growth factors of the micro-investments market are:
- Internet banking driving the growth of the Banking-as-a-Service (BaaS) platform market
- An increasing number of customers use Internet banking and find it more reliable for a variety of services, such as 24-hour banking, cash transfers, balance checks, account statements, and online purchases.
Also, according to FinanceYahoo, the micro-investing platform market demand is estimated to grow at 21.1% CAGR between 2022 and 2032 as compared to 19.0% CAGR during the period of 2017-2021. This is influenced by the increased popularity of micro-trading apps around the globe and the growing demand for mobile-first investment solutions.
In this article, we will consider the most critical aspects of the best micro-investing apps, namely:
- How a pandemic drives micro-investing trends
- Underlying factors of success of micro-investing apps like Acorn
- Monetization strategies of micro-investing apps
- How to develop an investment app: features and technologies
How a pandemic drives micro-investing trends
Building an investment application, you should consider that we have recently witnessed the crash of stock markets caused by the coronavirus pandemic. They currently drop and then recover whenever we hear about the death rate stabilizing or that lockdown limitations are easing in some countries. However, where there is room for improvement, we find areas ripe for investment, even in uncertain times. Naturally, such an unstable economic situation makes people afraid of making large purchases or investments.
In this regard, we can also see a significant impact of the pandemic on investment trends 2020. This year, they all are about keeping things small and "micro." People still are thirsty for information about where to invest funds intelligently to stay at the top of a situation regardless of the current recession. As most of us consider this period as not the best time for playing big, micro-investments have become the new trend dominating today.
Underlying factors of success of micro-investing apps like Acorns
Financials by Nick Brito
Today, we don't only want to be constantly online, but we want to stay online even on the go. The growing demand for mobile apps has led to an urgent need for mobile financial management. There is no surprise that the popularity of mobile micro-investing apps has quickly increased as well. These top five apps are the best examples of micro-investing solutions that proactively address the tech-savvy investor's needs.
Acorns
If you are going to create a mobile investment app, you should check Acorns as a great example. This app is at the top of the list because it makes micro-investing really easy without extra-charges. It is famous as a cost-effective solution for investing your spare change to your linked credit or debit card. For example, for an amount of 5,000 USD, you will only need to pay 1 USD per month. Behind the brilliant idea, there is also a nailed digital experience that allows you to save money without even thinking of it.
This micro-investing application is mainly designed for millennial investors and encourages investing early and often and with minimal effort. Acorns allows you to track how your investments are doing day to day, and data says that an average user checks the app almost every day.
Robinhood
Robinhood is one of the best micro-investment apps available in the app store. Since its launch in 2013, Robinhood has aimed to be easily accessible and affordable for everyone. It is an entirely free application that doesn't charge any fees to open an account. One of the biggest advantages of this app is its simplicity. Unlike many other investing apps, it doesn't use complicated terms and concepts.
On the contrary, its language is very easy to understand for beginner investors. Unlike Acorns, Robinhood allows you to trade full stocks, buy or sell with Bitcoin, and stay on top of your investments with real-time market data. Do you want to learn more about how to start an investment app successfully? Check the Robinhood app's roadmap.
Public.com
Public.com is the sweet spot between the advantages of a social media application and a micro-investing solution. It allows connecting with other investors like on social networks. If you don't know how to start with micro-investing, communicating and interacting with more experienced investors will help you. The Public's most appealing benefit is the availability of more than 50 ready-to-go themes that bundle similar companies together and make micro-investing much easier for the user. The investment app features include fractional shares, referral bonuses, real-time trading, and in-app support.
Stash
Stash is created for new investors and has a very transparent payment system. It doesn't charge any trading fees or commissions. The app is user-friendly and offers the division of accounts by the investment risk level into three main types (conservative, moderate, and aggressive) based on the preliminary user survey. Once the user completed it, the app provides a list of companies and profiles to invest in. Consequently, you can choose where to invest by specific interests, specific types of services, products, and companies.
Betterment
If you want to create an investment app, it's recommended to investigate Betterment, as it can provide you with many ideas for your own app. Betterment is an excellent micro-investing solution for those who need professional assistance. It provides access to real financial advisers who can help you and recommend the best option in various financial cases. The app enables speaking with financial experts in the direct in-app messages. You can also sign up for the Premium service and get unlimited access to phone consulting in addition to messaging. However, you should keep in mind that you must have a $100,000 account minimum to apply for the Premium access.
Monetization strategies of micro-investing apps
BPay by Chris Phillips
Have you known that the most profitable micro-investing apps in the world are free to download? You may wonder how does an investment app make money then? It must any other way round. So, let's consider what's the secret of the most profitable yet free of charge micro-investing apps. Here we take a closer look at the four most popular and effective app monetization strategies.
Advertising
Digital advertising is the classics of monetization practices for mobile applications, websites, and other online platforms. It's commonly easy to set up and implement. Ad providers can offer many appealing deals that may make you consider in-app advertising as an option for your product. However, you should keep in mind that too much advertising can negatively affect your apps' traffic. So, be sure you don't overuse it.
Freemium
Freemium is an app monetization approach that implies using most of the app functionality for free. Such apps make money by offering paid premium features to users. More than 50% of app developers recommend a freemium approach because it brings users additional benefits. For instance, they can try an app before purchasing premium features and make better-informed buying decisions. It sets trust-based relationships between a brand and users, makes them more loyal, and creates positive conditions for promoting new app features and generate revenue.
Affiliate programs
Most of the leading developers like Google, Microsoft, and Apple offer affiliate programs that are open for mobile application developers. Such programs don't usually offer high commissions; however, they are an excellent option for an additional income. Plus, you get an opportunity to select from an extensive range of apps, choose the hottest ones, and promote them in your application. It's also advisable to look for topic-related businesses that offer affiliate programs and offer them an opportunity to promote them in your mobile app.
Subscriptions
Subscriptions are recognized as one of the most effective ways to generate in-app revenue. They usually earn from two to three times more than an average app using advertising, freemium, or affiliate programs. According to this principle, users are charged monthly for using an application. It's highly recommended to offer users a free trial to let them try out an app before making a paid subscription. Usually, free trials span from a week to several months.
How to build a micro-investing app: features and technologies
Online banking by Dmytro Novitskyi
Now, let's take a look at how to make your own investment app. First of all, let's consider the key features a great micro-investing application should have.
Bank-grade security
When building a custom investment app, it's critical to provide bank-grade security. The app must have the highest category of SSL certificates, which is the "A+" category. It also requires 256-bit encryption.
The ability to transact and invest on the go
Another most crucial requirement is to provide all essential investment features available on the go. App convenience and usability are vital criteria for a successful financial application.
Round-the-clock investment assistance
Many beginner users may need assistance and help when using an application for the first time. That's why it's recommended to include app features, such as in-app messaging with a support team or easy access to financial consultants by phone.
User-friendly interface
The app intuitiveness is one of the foremost aspects of a successful digital solution, particularly for a financial niche. It allows distressing users and making their experience with an app more enjoyable.
Availability on Android and iOS
It's advisable to create an investment platform available on the most popular operating systems, such as Android and iOS. It allows you to cover the larger audience of potential users.
Real-time push notifications
Push notifications are essential for investment apps because they help users always informed about the latest updates, changes, and transactions. They also help increase user engagement.
To build an investment app, it's advisable to use then next types of API:
- Plaid API to connect bank accounts to the app
- Xignite to provide market data feed APIs
- Ally to offer investment APIs
- Quandl API for stock data.
Best Micro Investing Apps to Learn From
Now, let’s review the best micro-investment apps on the market and their benefits for users.
SoFi Invest
This app is great for beginner investors because it offers $0 stock and options commissions. One of the SoFi benefits is that investors can buy fractional shares of stock for as little as $5.
This means that even if you are an investor with a tiny deposit, you can open an account with SoFi and invest that tiny amount of money, even in stocks with high prices. Its other features are:
- Bonuses for retirement contributions
- Access to venture capital
- More than 6,000 commission-free mutual funds
- Both active and automated traditional, Roth, and SEP IRA accounts
Number of members: over 7.5 million
Annual fee: 0%
Asset types: Stocks, Mutual funds, ETFs, Alternatives
Acorns
Acorns is a micro-trading app that helps you save and invest. Its main benefit is that, based on its financial questionnaire, it picks and maintains your investment portfolio. Its main features include:
- Compound interest calculator that shows you the estimate on how much your investment will grow over time based on such factors as your initial deposit, contributions, and inspect rate.
- Recommendations for micro investments portfolio based on your money goals
- Automatic portfolio rebalancing
- Automatic dividend reinvesting
- Ability to view your performance in real-time
Number of members: over 8.2 million
Annual fee: $36 per year
Asset types: Stocks, ETFs
Robinhood
Robinhood is a comission-free stock trading and investment app. One of its main perks compared to competitors is that it supports cryptocurrency. Also, it offers commission-free trading and takes no annual fee. Here are its main features:
- Free cryptocurrency trading
- Fast approval of deposits
- 24/7 customer support
- Free ATM withdrawal
- Recurring investments
Number of members: over 21 million
Annual fee: 0%
Asset types: Stocks, Options, ETFs, Cryptocurrency
Final Thoughts
Micro-investing has become one of the top trends in the financial world today. Thus, the demand for micro-investing apps is increasing too. This article provides a brief overview of the most critical aspects of a successful mobile solution and the best practices on how to build an investment app. Hopefully, these insights will help you create a mobile app for an investment company that will bring it at the top of the competition.
Are you probably looking for a reliable tech partner to implement your mobile app idea? S-PRO has an experienced development team that will help you build a micro-investing app that exceeds your expectations.
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