Roman Dereka Head of Sales Department
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Case Study: how we have developed an online fund platform that helps investors build wealth

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create online fund platform

People have diverse financial goals, and it is totally clear that they want to grow wealth. Nowadays, technology continues to become more powerful making a wide range of powerful online investment solutions available in the market. The Internet has made it easier than ever for investors to create wealth online. Online investing is a common practice to do with your money if you want to increase your savings and build wealth. However, to invest money, you should determine your investing goals, the fund platform to invest and when you want your goals to be achieved.

Client and Requirements

Our client’s business has a huge presence in the financial industry. After years of working in a financial segment and covering a multitude of diverse occupations, such as in global finance, budget analysis, portfolio management, and financial forecasting, he decided to create a unique B2B solution focusing on services and tools, and not on product distribution. The concept was to provide an online building and portfolio management solution designed to help investors build wealth.

Project challenges when developing the online fund platform

  • UI/UX design was truly significant for our client, so our designers have delivered an excellent and user-friendly design that enhanced user experience and increased user retention.
  • Our dev team lacked the whole project vision that contributes to the unclear idea of what are the objectives and key features an online fund platform should include.
  • A complex project logic, trends and risks estimation algorithm have made the development process more time-consuming and effortful.

Our solutions to the online fund platform development

  • The client wanted a highly secure system, so our team of software developers implemented hi-tech solutions to keep it highly protected.
  • Extensive notification system was created to keep users up to date. Also, our software specialists suggested implementing the concept of diversification - the idea of creating a portfolio that includes multiple investments in order to minimize risks.
  • Our team chose Scrum to manage the project successfully dividing it into milestones, and Kanban to visualize the development stages.
  • The following technologies and tools were applied while development:
    Symfony, Doctrine ORM, AngularJS, JQuery, Sonata Admin, JWT API authentication, HWI Oauth, JMS DI, Beanstalk Queue, PHPUnit, Behat, GuzzleHTTP, wkhtmltopdf

The major features of the online fund platform

Portfolio

There are 5 user types: super admin, admin, allocator, advisor, and client in the platform. You can create as many portfolios as you need on a free base, but you can register as a client or advisor. To register as an advisor you should provide code ORIAS that grants rights to provide financial services as an intermediary. Advisors work with clients: monitor all their actions, check and confirm them. Before creating a portfolio, clients determine a level of risk from 0 to 10. There are 4 profiles proposed by the platform:

    • Safe: Target risk at 1.
    • Cautious: target risk at 3.
    • Balanced: target risk at 5.
    • Dynamic: target risk at 7.

Below we have depicted the steps of how you can create a portfolio. There are three options to select if there is a need to create a portfolio:

1. To create a new portfolio.

2. To import a portfolio.

3. To follow an existing portfolio.

portfolio

If you select an option to create a portfolio, the next step is to define a bank. There is a wide range of banks we have put together in order you can choose from based on your interests and current situation. The best choice for you will depend on your specific banking needs, competitive interest rates, pricing models, etc.

portfolio page

Then you should think of the amount of money you are going to invest, identify the performance objectives and a number of years required to meet the goal, determine a level of risk. Based on this information, the online fund platform can deliver the following results - assets without risk and risky assets.

portfolio page

Once the profile is defined, the tool will display the following information:

  • earnings targets over years;
  • target annual profitability;
  • a chance to reach the goal over years;
  • risk of loss over 1 year;
  • risk of capital loss over years;
  • the average amount of loss over one year;
  • assets without risk;
  • risky assets.

project page

You can change the following information: invested amount, performance objectives, number of years, risk and see directly how these indicators evolve in real time.

Diversification Strategy

Whether the market is bullish or bearish, maintaining a well-diversified portfolio is vital to any long-term investment strategy. A diversification strategy can help you achieve more consistent returns over time and reduce your overall investment risk. There is a time-tested rule: you shouldn’t put all your assets in one investment portfolio.

Diversification works because these assets react differently to the same economic event. In a diversified portfolio, the assets don't correlate with each other. When some asset classes rise, the others fall, thus reducing the overall risk of your portfolio. To maximize the benefits of diversification, we identified assets and separated them this way: some assets that increased, others that decreased to reduce risk more efficiently.

Also, you can read about: How to develop an investment platform

Notifications

Notifications are one of the most popular methods of communicating with users. Email notifications are useful when communicating basic information that is not time-sensitive. They allow them to keep abreast of message threads via email.

Email notifications were used for things that users and advisors need to go back to at some point in time. This includes successful signups, confirmations, passwords, annual, monthly and weekly reports, etc. Anything account-related and changes in a platform should also be communicated via email. Below we have identified some of the email notifications sent to an advisor or user (client) by admin:

      • Sent to an advisor when a customer is added to their pool or removed.
      • Sent to a user when he/she changes his/her plan, when payment is not successful.
      • Sent to a user when he/she adds a new payment method, when the payment method expired.
      • Sent when a user is registered, forgot his/her password and want to change it, when his/her password is updated.
      • Sent to a user when we detect a bad trend on his/her portfolio's funds.
      • Sent to the users when they are removed.
      • Sent to the user's annual, monthly and weekly portfolio reporting.
      • Sent when the payment process crashes because of the user expiry plan.

Trends and risks estimation algorithm

This feature helps to identify assets’ class risks, their target prices, and their bullish and bearish trends. The risk of financial data is calculated taken in conjunction with the volatility using more strategical and semiparametric Igarch model. The expected returns are calculated in relation to the risk premium measured by the markets. Each asset class has its target price determined in a quantitative sense. In addition, our proprietary algorithm identifies the trend of each asset class. Our developers use market performance concept in order to keep only upward trend asset classes. The strategic allocation is achieved by exploiting the diversification potential between asset classes.

Operations within the online fund platform

Below we have provided 4 types of operations that can be processed within the platform:

      • Subscription. The subscription business model is a business model where a customer must pay a subscription price to have access to the services within the online fund platform. The model was pioneered by magazines and newspapers but we also used it. Rather than selling products individually, a subscription sells periodic (monthly/ yearly/seasonal) access to the services within the platform.
      • Arbitration. Arbitration is a mechanism for resolving disputes between investors and brokers, or between brokers outside the courts. The objective of Arbitration is to provide a flexible and efficient means of resolving disputes quickly, cost-effectively, privately and confidentially without necessarily adhering to the formalized, technical procedures of litigation.
      • Payments. All the financial transaction are integrated, orchestrated and monitored in the online fund platform. It delivers consistent processing across multiple payment types, enabling banks and financial institutions to converge their payment operations on.
      • Redemption. The redemption of an investment may generate a capital gain or loss, and the taxation of capital gains is reduced by capital losses recognized in the same year. Capital gains and losses are recognized on both fixed-income investments and mutual fund shares.

All mentioned above operations can be filtered:

operations

Benefits the online fund platform provides

We have identified some benefits the online fund platform offers. Let’s take a closer look!

      • Transparency. The platform provides transparency-based services to investors that are independent of the product distribution and do not raise conflict of interest.
      • Scalability. Online fund platform offers relevant allocations on all savings distributed by institutional players. The tool can work on a wide range of funds, exchange traded funds, euro funds, structured products, etc. Online fund platform establishes conditions to distribute rules and management decisions to make financial investment advice scalable.
      • Round the clock support. Online fund platform has an innovative data management technology and can synchronize the portfolios tracked by the tool positions automatically. Users can access the platform on a daily basis in a completely secure way 24 hours a day, 7 days a week.
      • Risk mitigation. There is never a risk-free investment. Risk planning helps to reduce risks identifying potential problems that could cause trouble for your investment, analyze how likely they are to happen, take actions to prevent the risks you can avoid.
      • Engagement and reliability. Online fund platform offers one-to-one sessions where we provide advisory services that will suit your individual investment goals and achieve great results. You have the chance to ask questions and interact with a proficient financial expert to make a better decision.

Bottom line

Nowadays people are becoming more tech savvy and applying online investing tools and techniques. The benefits of using online fund platforms are numerous and if used properly can help investors to grow wealth and drive their businesses. DDI Development team has created an online fund platform focused on delivering financial solutions through a unique combination of trusted advisors and a team of specialized experts. Having a vast experience in delivering financial solutions, we provide our clients with exceptional quality and a wide range of solutions as well as a suite of specialized consulting services focusing on your success.

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