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Invezz is a leading investing platform, offering millions of users daily news, analysis, and educational courses on investing.
David Merry, is the CEO of Investoo Group, a 45+ strong team based in the City of London. Investoo Group operates invezz.com as well as 25+ other financial portals which focus on providing world-class applications and information to retail trading enthusiasts.
Now is a critical time for financial organizations, and financial applications are booming as a result. The financial technology sector as a whole is projected to grow at a CAGR of 13.2% by 2024. Economic and political volatility means that having a grasp of market conditions, internal cash flow, and external influences can make or break the success of your application. Having an up-to-date insight into stock market performances across the globe can also give your organization an edge.
This is what the team at Invezz set out to offer investors by providing real-time stock prices* and data to complement our expert commentary and reviews - helping traders gain insight to make more informed investing decisions. Invezz is able to do this thanks to data provided by IEX Cloud. It furthers Invezzʼs goal:demystifying investing by providing simple-to-understand, unbiased information. Invezz is a global brand, offering investment courses and advice in seven languages.
In building this additional functionality, there were several challenges and lessons that arose that are applicable to anyone building a financial application.
Here are our recommended top seven pitfalls you should avoid when developing your application.
Managing too many financial APIs
Having too many financial APIs working with your application can make your job a lot more resource intensive. Unfortunately, many financial data offerings also tend to be restrictive, siloed, and complicated. IEX Cloud was launched in 2019 with the goal of breaking down these barriers and providing more transparency to the market. With over 150 endpoints, it makes a wide range of financial datasets available all in one place with a single API.
On the other hand, when you have too many APIs, you or your team will spend a lot of time managing them - and if the data provided from each API is in a different format, then youʼll have to constantly clean and process it for use with other data feeds. The quality of data from different organizations may also vary and impact any insights derived from it.
Furthermore, due to inconsistency with data quality and format, using multiple financial APIs can negatively impact the user experience, especially if one API suddenly fails and disrupts the data thatʼs displayed to users. Data displays can also be slow and disjointed, depending on how quickly data can be called via its API. It can also be more expensive. Using several services means you may have to pay for several licenses, not to mention the ongoing cost of managing the different APIs.
Finally, having several APIs can pose a security risk as the more APIs your application relies on, the more avenues a hacker has to potentially exploit.
Failing to consider scalability
Invezz is in the midst of a rapid global expansion. As part of this, our operations and technology need to scale quickly to several new regions and time zones. Leveraging IEX Cloud to provide financial data to enhance our expert advice and insights, this process has been seamless. IEX Cloud takes on a lot of the legwork involved in connecting our investors to relevant financial data.
When building your financial application, think about your short and medium-term growth plans. If this includes entering a new market, region, or expanding your products and services, then the technology you use and your backend infrastructure must be able to support these plans. Otherwise, your future growth could be hindered or you could face the costly exercise of changing your infrastructure down the line.
Swell Investing provides a cautionary tale here. The company announced its closure in summer 2019 after just two years of operating due to a lack of scale. Sadly, the company was unable to achieve the scale needed to sustain investment independent operations despite the burgeoning growth of social impact investing (which is estimated to have reached $17 trillion in assets). It stated:
“Our journey began as a mission that every dollar you invest would have a positive impact on the world… While weʼre incredibly proud of what weʼve accomplished together, Swell was not able to achieve the scale needed to sustain operations in the current market. As a result, we will be closing.”
Building everything in-house
Sometimes it pays to work with external experts. Companies like IEX Cloud are experienced in niche areas, like maintaining the infrastructure that brings together multiple data sources through a single API. Oftentimes external experts will far outstrip any in-house teamʼs experience. By delegating some parts of your business to third parties, your team can focus on more value-added activities like building a superior user experience, developing lasting customer relationships, and innovating to remain on top of the latest trends.
Failing to stay abreast of financial legislation
For some Fintechs, it can be tempting to innovate faster than regulators can pass laws in order to stay ahead of competitors, especially when based in a country thatʼs slow to regulate. However, this can be risky as your entire operations could be upended with one ruling. Take, for example, the Chilean Supreme Court ruling that enabled state-owned banks to close the accounts of cryptocurrency exchanges Buda.com, Orionx, and CryptoMKT.
Changes to legislation may also impact the viability of a market. New laws resulting from Brexit, for instance, caused several financial organizations to restructure their U.K. arms or pull out of the market completely. The German digital bank N26 no longer operates in the U.K. due to Brexit market conditions and costs.
Alternatively, changes to legislation may make it easier to enter and operate in a market. Fintech hubs in Switzerland, Mexico, London, and Singapore regularly pass regulations to encourage more financial innovation in the region. One example is setting up ʼsandboxesʼ that enable startups to test new technologies without adhering to all financial regulations governing existing organizations.
Of course, sometimes itʼs not possible to predict every new law or ruling that could impact your business. That being said, staying on top of trends and all legislative changes to the best of your ability can prevent costly mistakes later on and open up new business opportunities. If youʼre scaling globally, itʼs worth having a local manager who can ensure your local operations are compliant, or alternatively, using a third-party with experience in the region.
Having poor security practices
The consequences of a breach can be more serious for financial organizations compared to other industries. The finance sector has the second-highest cost per breached record, just behind healthcare. It costs, on average, $210 per record compromised. This doesnʼt include the ongoing costs to your brand, customer loyalty, and reputation.
When building your financial application, consider the potential vulnerabilities and the attractiveness of your application to would-be attackers. Applications that store and transmit personal financial information, for example, will require more robust security than an app that collates and distributes public financial insights.
Additionally, consider any vulnerabilities that may arise due to human error or a lack of cybersecurity training. All employees must understand their role in securing your application, for instance by using effective passwords that are regularly changed and locking their computers when not in use. Youʼll want to ensure that any third parties you work with also take necessary precautions, depending on how you interact and work with them.
Finally, not all financial data sources are reputable – there are many vendors that distribute data without the proper license or rights. Itʼs worth doing due diligence on your provider. This can help you avoid scenarios where a vendor is out of compliance and the liability could get passed down to you and your Fintech.
Forgetting about accessibility
When building your application, donʼt forget about catering to users with disabilities. The best user experiences include assistive technologies that make accessibility easy.
U.K.-based bank Natwest worked with the Royal National Institute of Blind People (RNIB) to make its mobile app accessible to blind and partially sighted users. This includes text-to-speech alerts about where someone is on the app, account balances, and whether the account is in credit or overdrawn.
Remaining still
In todayʼs fast-paced and ultra-competitive market, one of the biggest mistakes you can make is to stop innovating. Defaulting to the status quo and playing it too safe can hinder your long-term success.
We suggest setting aside regular time each month or quarter to understand the latest innovations and opportunities in your market, and to talk to your users about their changing needs and how your application can help.
Just look at the innovation thatʼs occurred over the past decade. Ten years ago, you couldnʼt have predicted that weʼd pay in-store with our smartwatches and phones, the rise of Bitcoin, or the increasing role of artificial intelligence (A.I.) in our financial decision-making.
In action: IEX Cloud and Invezz
When looking to scale globally and provide traders with understandable, accurate financial data, Invezz turned to IEX Cloud. The integration provides traders with share prices for Amazon, Apple, Tesla, The Coca Cola Company, and more. This runs alongside Invezzʼs regular advice pieces, courses, and broker reviews, which aim to make investing accessible to everyone.
The Invezz team recognized the need for a solution that would do a lot of groundwork for them, enabling them to focus on providing expert advice and unique insights. The team wanted to avoid setting up multiple APIs and establishing agreements directly with different data providers, which would be a costly (if not impossible) exercise due to the expensive and lengthy contracts involved. Not to mention managing multiple partnerships can quickly become time and resource intensive. Having relevant financial data in one place via IEX Cloud, therefore, was a huge positive for the team, saving them significant time and resources.
In just a few days, the data was set up and integrated via IEX Cloudʼs single, easy-to-use API. Pricing was cost-effective as it scales according to company size and usage.
All of Invezzʼs work is guided by our core values of accuracy, transparency, efficiency, ambition, and openness. Working with IEX Cloud aligns with all of this, providing Invezzʼs users with accurate and transparent financial data to help them reach their goals and make more informed investment decisions.
Key takeaways
Like anything worthwhile, building a financial application requires a strong foundation and a good amount of preliminary work to ensure its success in the future. This ranges from looking at your security and legislative processes, to considering scalability and effective app development.
For some needs, it can be worth investing in a third-party solution to do a lot of the legwork for you - empowering your team to focus on their specialist areas. Getting external expert help will free up resources to build relationships with your customers, improve your user experience, and gain an edge over the competition.
Invezz is a leading investing and analysis platform, offering millions of users daily news, analysis and educational courses on investing.
To get started on your educational journey visit invezz.com
* Real-time stock prices from the IEX Cloud API are different from real-time stock data made available through direct connection with IEX Exchange. Learn more.
