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October 29, 2024

Trading App Development Costs: Invest Wisely

October 29, 2024
Read 7 min

Ever wondered how trading apps are reshaping the way we invest?

They’re everywhere, and it’s no surprise! 

These apps break down barriers.  So, here’s the deal: the trading app market was valued at about USD 24.1 billion in 2022. That’s huge! And get this—forecasts say it could blow up to over USD 150 billion by 2032.

Crazy, right?

High brokerage fees? Gone. Complex interfaces? No more.

They make trading simple. 

How?

With an intuitive user experience. Plus, they provide real-time data right at your fingertips. It’s like having the market in your pocket!

So, what exactly is a trading app? It’s your go-to buddy for buying and selling assets. 

There are different types of trading apps, including:

  • Brokerage apps: Traditional apps that allow users to buy and sell assets.
  • Robo-advisors: Apps that provide automated investment advice based on user preferences.
  • Social trading platforms: Allow users to observe and replicate trades from successful investors.
  • Fractional share apps: Enable users to buy portions of high-priced stocks, making trading accessible to those with limited funds.

Want to build a genuine experience? You need to understand the hidden costs of developing a trading app.

So, what’s next?

 Let’s break down those key factors! They can help you connect better with your users. 
Ready? Let’s go!

Understanding Trading Applications

What Are Trading Applications?  

Trading applications are mobile or web-based platforms that let users trade financial instruments like stocks, ETFs, and cryptocurrencies. They offer tools for real-time data, portfolio management, and educational resources, helping users make informed decisions. 

Why Are Trading Apps So Popular?  

The rise of trading apps is driven by several trends that show how technology is changing the investment landscape. In fact, the mobile segment made up over 60% of the market share in 2022, highlighting just how much people prefer trading on their phones.

Key Trends Driving Interest  

  • Mobile Trading Takes Charge: More and more investors are switching to mobile platforms for their convenience. They want the ability to trade anytime, anywhere.  
  • Rise of Retail Investors: With commission-free trading becoming the norm, there’s been a big surge in retail investors, especially among younger generations.  
  • Tech Advancements: Innovations like AI-driven robo-advisors and real-time analytics are making the user experience better and helping people make smarter, data-driven choices.

Who’s Using These Apps?  

Retail investors are now the majority, making up over 71% of users in 2022. This shift shows a move away from institutional trading towards individual participation. As for platform preferences, Android users dominated with over 55% of the market share, while iOS is gaining traction thanks to its strong focus on security.

How Much Does It Cost to Develop a Trading App?

The cost of developing a trading app similar to Robinhood can vary. Several factors influence this cost. These include the app’s complexity, its features, and the geographical location of the development team. Here’s a breakdown of costs by development phases:

Development PhaseCost Range
Research and Planning$2,000 – $20,000
Design and Development$8,000 – $120,000
Testing and QA$3,000 – $40,000
Deployment$1,000 – $20,000
Maintenance and Support$1,000 – $10,000 per month

Additionally, development costs vary based on app complexity and the type of trading app being built. Below is a cost comparison:

Type of App/ComplexityBasicModerately Complex AppsHighly Complex Apps
Brokerage Apps$40,000 – $50,000$75,000 – $135,000$200,000 – $500,000
Robo-Advisors$35,000 – $150,000$50,000 – $300,000$300,000 – $500,000
Social Trading Platforms$50,000 – $150,000$150,000 – $300,000$300,000 – $500,000
Fractional Share Investing Apps$50,000 – $150,000$150,000 – $300,000$300,000 – $500,000

Custom vs. Ready-made Trading App

When it comes to mobile app development, banks face a significant choice: build a custom app or go for a ready-made solution. 

Developing a custom app is like hiring a personal trainer. It’s tailored to meet specific goals, ensuring a personalized experience that aligns perfectly with the bank’s unique requirements. 

On the other hand, choosing a ready-made solution is akin to following a fitness video. It can be effective and convenient, but it may not fully address the unique needs of the bank or its clients. 

Each option has its strengths and weaknesses. Banks must carefully consider their priorities before making a decision.

Common Features of a Trading and Investing App

A successful trading and investment app must include essential features that cater to both beginner and experienced investors. These features enhance the user experience, making trading accessible and efficient. Here are some common features that every trading app should have:

  • Dashboard: A user-friendly interface displaying key account details and underlying asset performance.
  • Portfolio Management: Tools to help users manage and track their investments.  
  • Market Data: Real-time access to trading asset prices, news, and financial reports.  
  • Trading Functionality: A seamless way to buy, sell, and trade assets.  
  • Fund Transfers: Integration with banks for easy deposits and withdrawals.  
  • Watchlist: Users can track the performance of assets they’re interested in.  
  • Notifications and Alerts: Keep users updated with market changes and investment opportunities.  
  • Educational Tools: Tutorials and articles for beginner investors to learn about trading.  
  • Security: Robust measures to protect user data and ensure secure transactions. 

Hidden Costs in Trading and Investing App Development

What about the unspoken things? Beyond initial development, trading and investing apps often encounter additional expenses. These costs can significantly impact the overall budget. It’s essential to consider these factors to prevent surprises later on. Here are some common unanticipated costs:

  • Regulatory Compliance: Ensuring the app adheres to financial regulations, which may vary by country.
  • Marketing and User Acquisition: To compete in a crowded market, significant investment in user acquisition is necessary.
  • Customer Support: Ongoing customer service and support to address user queries and issues.

How to Reduce Costs in Trading and Investing App Development

After understanding the cost structure and the unspoken expenses, I bet you’re wondering whether there’s a way to reduce those costs—am I right? 

To reduce development costs without sacrificing quality requires strategic planning. Here are some effective approaches:

  • Efficient Project Management: Strong management ensures that the development process stays on track.  
  • Outsourcing Development: Partnering with offshore teams with deep expertise in trading app development like Itexus can significantly cut labor costs.
  • Phased Rollouts: Introducing core features first and adding more complex functionality later helps spread costs over time.  
  • Utilizing Open-source Technologies: Utilizing open-source frameworks can reduce the need for custom-built solutions.

Crafting a Trading App: Step-by-Step Guide

So, what are the key steps to making that happen? Building a trading and investing app involves several critical steps. Here’s a step-by-step guide to help you navigate the process:

  1. Conduct Market Analysis: Understand the needs of your target audience.  
  2. Formulate a Development Strategy: Choose between custom development or white-label solutions.  
  3. Design a Seamless UI/UX: Focus on creating an intuitive user experience.  
  4. Develop the App: Execute the development process with attention to security and functionality.  
  5. Implement Rigorous Testing: Ensure the app performs well across all devices and meets regulatory standards.  

Prepare for Deployment: Plan for a smooth app launch and post-launch support.

Infographic displaying step by step trading app development

Revenue Generation Models for a Trading App

Now that you have a clear roadmap for building your trading app, let’s focus on revenue generation. So, what are the main models for generating revenue? Here are some effective strategies:

  • Transaction Fees: Charging users a small fee for every trade.
  • Subscription Plans: Offering premium services through paid membership tiers.
  • Advertising: Partnering with financial institutions to display targeted ads.

Interest on Cash Balances: Earning interest on uninvested user funds.

Final Words

Let’s face it: trading apps are making trading more accessible to a wider audience.

Understanding both the visible and unforeseen development costs is essential. This understanding allows you to create a truly successful app. From transaction fees to user-friendly features, every aspect enhances the overall user experience.

To apply these insights, you must have a software developer with deep expertise. Consider reaching out to Itexus, where our team can guide you through the intricacies of app development. Discover case studies showcasing our work with financial industry leaders.

Our team ensures your project meets market demands while providing a meaningful experience for your users. With the right partnership, you can effectively seize this opportunity.

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