‘Proptech’ and banking: A new ecosystem for a better experience when looking for a home

Human beings have been selling and renting properties for centuries, but that doesn´t mean the real estate market is unaffected by digitization. Technology is going to change the way we sell, buy, rent, design, build and manage homes and commercial properties.

The companies that will lead this revolution are the so-called “proptech” firms (from “property” and “technology”), but they won´t be the only actors. Banks have always played an important role in the real estate business (basically, by granting mortgages). Now, the cutting-edge financial institutions want to take advantage of this trend in order to offer a more complete service and improve the real estate customer´s experience.

“Banks are changing their mentality about the real estate sector,” says José Luis Arizaga, an expert in ‘proptech’ and head of the global program BBVA Home Experience. “Traditionally, the client ‘got married’ to a bank once it gave him a mortgage, but afterwards the relationship was cold and distant. Now, we want to play a more important role, one in which we offer great support to the client,  before and after the mortgage is approved, both online and offline,” he explains. “A home is an important element in a person´s life, and we want to be more available to customers, to better meet their needs.”

This new attitude, which translates into new services, won´t get far without new technological capabilities such as “big data.” Arizaga points to the example of the U.S. proptech company OpenDoor and to Valora,  a BBVA digital service that uses the power of data to help with valuations, so that clients make better financial decisions regarding the sale or purchase of a home. “The banks want to work more with the proptech companies,” says Arizaga, adding that in the 2018 edition of  BBVA Open Talent, special attention will be paid to these startups.

Apart from big data, what technologies is the smart money betting on in the real estate sector,? ”There are already cases of using artificial intelligence and blockchain,” Arizaga says. “But they´re still at the early stages. They´re more like medium- and long-term bets.”

Virtual experiences

Among the technologies that are beginning to hold greater weight in the real estate sector are virtual reality (VR) and augmented reality. Their great advantage is that they enable a client to “visit” a property from anywhere on earth, and to plan renovations of any size. Aware of the potential that RV holds for the real estate market, one of the leading consultants and investors in the sector, CRBE, last year acquired Floored, a New York startup specialized in this type of solutions, which is known for its 3D graphics.

Another standout example of this trend is Seeable, a British startup that uses virtual reality and augmented reality to develop apps that enable the user to visualize structures and accesses to buildings in a highly intuitive manner. In addition, it has marketed 3D applications adapted to all sorts of platforms, such as Oculus Rift, the virtual reality glasses owned by Facebook.

But there are also startups focused on confronting the classic inefficiencies of the real estate sector, giving a turn of the screw to accepted technologies. This is the case of  Clixifix, an SaaS (Software As A Service) platform that puts everyone involved in a real estate project in contact with each another. Movebubble, meanwhile, updates in real time the rental market offerings in London and learns from the preferences of the users, in order to send them the most appropriate offers. Another company,  Goodlord, uses a cloud computing platform to reduce the paperwork after a real estate transaction has been closed.

The majority of these startups aim for disintermediation and greater transparency, the two major trends in the future of the real estate sector. The economic commitments are considerable:  little more  than a year ago,  the consultancy CB Insights calculated that between 2011 and 2017, venture capital firms had invested $9 billion in proptech companies. These new companies, along with the cutting-edge financial institutions, will make a change for the good in the customer experience in the real estate sector.