The time has come. Software equipped with Artificial Intelligence (AI) is giving out investment advice, and we’re getting used to it.
It’s not a psychic reading—the algorithmic engine of a modern Robo-Advisor (RA) takes multiple factors into account before telling the client where to put their hard-earned cash. Their income, marital status, financial goals, and risks are all calculated before an automated investment is placed on their behalf, thanks to robo-advisory software development.
The popularity of RA services is on the rise, and Business Insider predicts a staggering $4.6 trillion will be managed by these systems by 2022. Many banks and wealth management companies see robo-advisory apps as an opportunity to broaden their reach and tap into new customer segments.
Developing sophisticated tools like this takes a lot of expertise and creativity. Luckily, Relevant has both, topped with solid hands-on experience in fintech software. Take a minute and check out two of our projects:
We know a lot about robo-advisory software development, and that’s why we’d like to tell you:
Table of Contents
Recently, a new subdomain of fintech has emerged. Its name is wealthtech and it employs cutting-edge technology to automate and streamline investment for everyone. Wealthtech includes robo-advisors, micro-investment, robo-retirement, and digital brokerage. RA tools, just like their human counterparts, rely on data analysis and knowledge of the market. But where humans tend to play it by ear, an algorithm carefully calculates every move.
Robo-advisory services are powered by AI and Machine Learning—the kind of tech we are very familiar with at Relevant.
In short, a robo-adviser is an online tool that offers automated wealth management with minimal capital requirements. Clients simply fill out a form that feeds the AI-enabled engine enough data to determine the best investment options for their specific financial background and objectives.
Once the initial setup and verification are complete, the software forms an investment portfolio using sophisticated algorithms. The software even makes the actual investments—in stock, bonds, real estate, currencies, precious metals, or other commodities.
RA platforms provide their services for a small subscription price or by charging a trading fee. Many solutions, like Betterment—the current industry leader—offer a mix of automated and human-assisted models. This service comes with an additional surcharge of 0.40% per year on the balance for premium investment advice.
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Want to know more about the intricacies of robo-advisory platforms? Or what it takes to build an ai robo-advisor? Then keep on reading.
RA platforms offer many advantages over the more traditional manual investment options. First, it’s the improvement in speed and accuracy of analysis and the unbiased judgment that humans simply cannot deliver. Then there’s the low starting balance threshold that democratizes the market. And let’s not forget the service is also available 24/7.
But how does all of this translate into identifying business requirements for robo-advisor platform development?
Here is our list of features every RA platform should have:
Are you hanging in there? We never said robo-advisor platform development was an easy task, but we do think the end result is worth the effort. Let’s take a look at the standard components of an RA platform – that is, all the little cogs that keep the machine working.
Below is a list of features and processes the system requires to operate. Note that while most of the core features mentioned here were created for the client, some of the functionality is intended for managing investors.
So, what’s the tech that makes all of this work?
We’ll do our best to keep this brief and try not to intimidate you with too many technical details. While you won’t be able to build an RA platform after reading this part, you’ll have a much better understanding of the way they work.
As you can see, robo-advisory platforms are sophisticated pieces of software that leverage the potential of modern technology. One more thing to keep in mind is you must adhere to the fintech security requirements when dealing with sensitive user data in finance-related apps.
Are you still with us? We’re almost there. But our article would be incomplete without this last part. How can you get started with your online financial advisor software development?
If you’re still on the fence about building your own robo-advisory service, our advice is: it’s time to get off the fence and take the first step. You need to find a reputable software partner who is comfortable with financial app development and start creating your RA platform today.
It might seem overwhelming, but we think you should get started by having a chat at Relevant. With our extensive experience in providing fintech software development services, we can begin working on your new shiny robo-advisor in no time!