Transactions that once took days to complete now take mere minutes, thanks to modern technology and new applications. Even in the finance industry, there’s an app for almost everything – from sending and receiving money to investing in stocks. If you’re heavily immersed in the stock market and believe there’s room for a new investing app, you may have considered developing one yourself. However, there are a few things you need to know first.
The Legal Implications
As with anything relating to investing and the finance industry, the Securities and Exchange Commission (SEC), keep a close eye on what’s going on. Their job is to make sure everything you do regarding money changing hands abides by all federal securities laws and regulations.
Whether you’re a startup developer or a big player on Wall Street, your operations are scrutinized with a fine-tooth comb. Any intentional misstep, or even an unintentional oversight, could lead to something as serious as a fraud allegation. If this happens, you could require the help of SEC defense lawyer Nick Oberheiden to handle any regulatory and statutory violations you may have made.
Every investing app goes through a planning stage to ensure it’s going to be what consumers want and what abides by all laws and regulations. Don’t skimp on planning, even if you’re excited to launch your app into the marketplace. Think about the financial services you’d like to offer, how much risk you’re willing to carry, and even which exchange-traded funds (ETFs) you’d like your finished product to include. Don’t be afraid to get a financial advisor or legal team involved in this process to make sure everything is above board.
Mapping Out the Details
Now that you have an idea of your app’s services and legalities, you can map out the details. This process involves developing robot advisors connected to servers that handle your money. At this stage, you also need to establish the gateways that allow market information to make its way to the trading system.
Include Necessary Features
Once system development begins, it’s imperative to focus on your app’s features that allow it to run like a well-oiled and secure machine. As you’ll be dealing with people’s money, having all the kinks ironed out offers the app’s users much-needed peace of mind. One of the most critical cybersecurity features is an SSL certificate. This ensures that no fraudulent activity can occur during the app’s use. Otherwise, you may find yourself under severe scrutiny from the SEC.
It’s also essential to incorporate 256-bit encryption, a two-factor authentication process for users to log in, and various investment options. A virtual planner can also be a worthwhile addition.
Establish Your Business Model
People don’t create investment apps out of the kindness of their hearts. They may want to provide a convenient investment platform, but they also want to make money. At the business model creation stage, you may like to think about how you’ll do this. You might look at a user-pay model with a subscription fee to use the app. Commission and some other charges may also be worth your consideration.
Once the outline of your app is ready, you can start the development and testing phase. At this point, you can work out any kinks, remove bugs, and make sure your app runs seamlessly before you launch it to the market.
Investment apps are becoming more popular by the day, but they can be risky ventures for those who aren’t sure what they’re doing. Remember to plan out your app development thoroughly while also putting thought into SEC laws and regulations to avoid potential fraud claims.
This post is contributed by Allan Smith from Day to Day Finance.
Disclaimer: This content does not necessarily represent the views of IWB.