Real Estate Innovation Bringing Home Return on Relationship
From the global perspective, innovators in the real estate space will contend with the following four critical developments that will improve overall customer satisfaction and position forward-thinking companies in the proper engagement context from which they can build a relationship with investors.
As the alternative lending infrastructure become more established, more consumer/small business credit platforms will productize their offering. Attention will shift to price comparison services such as Fundera, and more emphasis will naturally be placed on cultivating the relationship with potential users/consumers.
Liberalized Data Ownership
Data ownership is considered the most sustainable driver of competitive advantage, yet non-banks who have captured massive amounts of data still struggle to derive value from it. Those who manage their data best will compete with traditional lenders in a sort of “information war”. As one might expect, large technology companies built around capturing and ingesting proprietary data seem to have the best shot of winning. Watch out! Google (Search), Amazon (Commerce), and Facebook (Social)— are starting to build out their financial services infrastructure, primarily through payments products.
Full Service Solutions-Good or bad?
Many industry analysts are bullish on innovation though this ought not to be considered the norm. Lenders that are looking to position themselves as a “one-stop shop” for all banking needs should be leery of offering too big of a range of products and services comparable to traditional banks. To do so and remain solvent, they will have to avoid excessive overhead costs and maintain operational efficiency (e.g., quick turnaround times for credit decisions). There’s a chance that these lenders could one day displace some of the more established institutions. SoFi epitomizes this strategy. Note, they do so successfully because there is a strong emphasis on consumer engagement.
This brings us back to our original point that Real Estate is the perfect example of return on relationship business.
Over the past ten years, we have seen unprecedented changes in the overall technological landscape that directly affect relationships between transacting parties. This is no more evident than in Real Estate where growth strategies, marketing plans and most especially the consumers themselves demand the connectedness and purpose innovative, common systems. In short—the industry itself is primed better than most to bring about technological innovation cooperatively.
This article was originally published on Huffpo