Five examples of Proptech innovationThis article will explore five examples of innovation that have been initiated by the Proptech sector to disrupt the real estate space
As innovation has become paramount, digital technologies delivered by Proptech startups have been helping real estate companies to speed up processes and decrease complexity for themselves and their customers since the dot.com boom. Over the past year, with Covid-19 affecting operations and leading to offices closing, organisations in the space have needed to evolve further, and implement more flexibility to stay competitive and maintain customer experience.
Here are five notable examples of Proptech innovation that look to disrupt the property sector over the course of this year, and beyond.
1. AI-powered underwriting
A vital part of the process of securing property deals is underwriting. Here, mortgage applications are examined by looking into the borrower’s credit history, property value and other financial factors, along with fraud checks. This looks to mitigate the risks that comes with the typically hundreds of thousands of pounds involved, and can be time consuming for all stakeholders involved.
However, underwriting software powered by AI have been helping financial institutions to process financial spreadsheets such as operating statements and rent rolls. Clik.ai, for example, helped underwrite Bellwether Enterprise’s $7.9 billion loan volume and an annual servicing portfolio of $31.2 billion in 2019, and reduced time spent on analysing spreadsheets by 50%.
“Automating the commercial real estate underwriting process is helping banks and lending institutions review important documents, such as rent roll and property cash flow data, in minutes, which enables the lender to capitalise on asset management,” said Clik.ai’s CEO, Parag Goswami.
“Additionally, incorporating automated underwriting services alongside everyday asset managers and underwriters is befitting Proptech innovation. Core competency is expanded to address one of the most crucial issues pertaining to IT in the commercial real estate industry today – namely, easily moving data from raw PDF and scan documents to spreadsheet and software systems.”
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2. Automated infrastructure
As well as underwriting, automation has proved useful for ensuring more efficient communication and payments for customers. With this becoming more common, it’s vital that Proptech companies find a way to stand out in the market.
“Businesses in every part of the property sector are starting to bring innovation to the table,” said Tom Reiss, CEO of Roby AI. “Some key examples are auto-communication (which delivers dynamic email and SMS messages), auto-payment methods and scheduling too.
“Whilst these are some key elements delivering innovation to property businesses, the way that they communicate together is also crucial. A notable aspect of innovation within Proptech is no longer just about a new product, but rather how it is implemented and how it supports wider business aims.
“Innovation is not just about creating something new and different, but it is important for founders to have a deep understanding of the market in order to bring something to the table that sets their business apart.”
3. Home management software
With property companies needing to operate remotely over the past year, a need has emerged for a centralised hub for prospective tenants, landlords and other stakeholders to leverage in order to complete tenancy deals quicker. Some networks in the Proptech space have facilitated innovation in the form of home management software, where all household bills can be accessed, and problems with the home can be efficiently solved, all in one place.
“A rapidly evolving area is simple home management, for example platforms like Homehero, which is building an operating system for the home – through which, you will be able to manage all appliances but also pay bills and quickly hire tradespeople,” explained Alex Stroud, analyst at Concentric.
“We will start to see more value-add software like this being added to commercial and residential properties, but also features like computer vision software to alert operators when people have fallen over or are in danger zones, such as construction sites or care homes.”
Kenny Alegbe, CEO of HomeHero, commented: “What we’re doing here at HomeHero, is building AI-powered tech that will be able to support property professionals to communicate through an omnichannel approach, increasing efficiency and delivering a completely innovative and personalised resident experience.”
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4. 3D capturing technology
Another avenue of innovation delivered by Proptech startups has been 3D capturing technology. Also contributing to facilitation of remote operations, this has allowed prospective buyers and renters to look at properties without needing to physically attend viewings, while helping real estate firms to save money.
James Morris-Manuel, managing director and vice-president EMEA at Matterport, said: “As the Proptech industry continues its digital transformation, the sector is teeming with innovation. 3D capturing technology has been embraced by most, if not all of the UK’s largest estate agents, with notable effects.
“Buyers, renters, brokers, agents and property managers alike are exploring ways to provide even more value during the real estate process. These can include developments like sophisticated virtual staging offerings, saving thousands of pounds, as well as weeks of time and logistics related to physical staging.
“Meanwhile, in the commercial space, retailers are exploring using digital twins to create virtual pop-up stores, complete with ecommerce opportunities embedded.”
5. Auto search capabilities
A final example of Proptech innovation comes from the disruptive sector’s emergence within websites during the dot.com boom. Search engines have evolved on these sites to give users more accurate options, according to their needs.
“An auto search/find feature has been adapted by many Proptech companies that firstly allows them to market many properties over a wide geographical area,” said Nick Riesel, managing director of FreeOfficeFinder.
“This wide area is possible due to the coverage of the internet. This then enables them to find the solution for tenants at the touch of a button after putting the requirements into a database.”