With the rise of the start-up culture in the last decade, every sector has witnessed the entry of a large number of new entrants. As a result, existing as well as new companies are trying to differentiate themselves by offering varied services. Moreover, the integration of technology with most organizational functions has paved the way for major changes in the way companies conduct their operations.
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Evolution of Fintech
Over the last several years, the financial services industry has undergone a shift. This has transformed the way financial procedures are executed. Fintech or financial technology companies are those companies that make use of technology to provide more efficient financial services such as banking, insurance, investment advisory, etc.
The term ‘Financial Technology’ in itself refers to software technology that enables or improves banking and other financial services. As customers are becoming more comfortable with the use of sophisticated technology and tools, fintech companies have witnessed impressive growth. Those financial institutions or corporations that have been averse to the integration of their functions have been left behind and are now struggling to catch-up with the ever-evolving financial industry.
Fintech Companies and Real Estate
Real estate is one such sector that is deeply connected with the financial services industry. As a result, the recent developments in the financial services industry have made a profound impact on the real estate sector.
- Facilitating Transaction: – The big-ticket size of transactions in the real estate industry means that anyone who is investing in real estate would be spending a significant amount of money. As a result, the investor would want to be assured of the security and transparency of the transaction. Financial Technology has been making the process of payments safer by creating tamper-proof records and also eliminating the need for a regulator.
- Ease of Viewing: When it comes to real estate, no one would rent, let alone buy, a property without personally seeing what it is like, whether it suits their needs, and whether it is worth the money being asked for. However, this process of viewing the property and engaging with a broker can be exhausting and time-consuming. Thus fintech companies are making it easier to get an all-round view of the property with the help of AR and VR tools and tech. Moreover, investors can now also finalize agreements without being physically present with the help of blockchain-powered systems.
- Data Analysis: While the real estate industry will continue to remain important, it cannot be denied that volatility is an inseparable part of it. When real estate is not profitable, it can seriously affect the decision of investors, and thus it becomes important to know where it is heading. Financial technology helps to not only create detailed records but also analyze them to determine the future prospects of the real estate industry.
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Examples of Fintech Companies That Are Redefining Real Estate
The entry of new start-ups as well as a revamped business models of existing fintech companies, are redefining real estate.
- Zillow Group Inc.: Zillow Group Inc. is a fintech company which deals with homeownership along with rentals. It provides important information on the availability of housing, determining optimal prices, available financing options, and creates a direct communication channel between the sellers and potential buyers. The company works on the belief that fintech would become the primary means of carrying out real estate transactions in the future. Zillow Group Inc. has been able to capture millions of customers because of the factor of ease, which it integrates with real estate transactions, owing to its large database, technology, and varied services.
When it comes to property sellers, Zillow simplifies the selling process. Owners can sell their property to Zillow on a cash offer, as per their own timeline. Zillow has been known to make competitive offers and levies a 6-9% service fee from the sellers. After making any necessary repairs or updates, it resells the property through a local Zillow Premier Agent. Buyers can choose a Zillow-owned house and can move in when they want. Not only that, but Zillow can also connect the buyers and sellers through customer service agents. Zillow provides an easy means of searching, touring, applying, and paying rent for those individuals who simply wish to rent a property. Zillow also makes it easier for landlords and property managers to list a property, thus facilitating the execution of various tasks of property management. Since investment in real estate requires significant sums of money, many individuals need to get a loan or mortgage, which can prove to be difficult for a novice. In such cases, Zillow Home Loans, an affiliate lender, provides the customers with simple yet secure financing.
- Fiserv Inc.: Fiserv Inc. is a leading fintech company that makes use of technology to cater to the property management needs of firms as well as of financial institutions with which it has partnered. Over the years, many banks have begun depending on Fiserv Inc. to process payments that are related to real estate transactions. The company has managed to drastically transform the traditional lending processes and ensured speed and transparency in the transactions by providing accurate information to lenders. In simpler words, Fiserv Inc. has made efforts towards automating payment collection, which has made it possible to improve the customers’ cash flow and has eliminated the need for manual collection and processing of payments.
The RemitStream Property Management Lockbox has accelerated the payment collection cycle with the help of automated outsourced processing and has also simplified exceptions management and transaction reporting. Digital Payments SDK has brought about the possibility of easy-to-implement payment processing APIs, which play a major role in helping Property Management. Not only that, Digital Disbursements through Fiserv’s digital payout solution facilitates all types of payments related to real estate. This ensures monitoring of all transactions, better compliance and control, easier detection of frauds, and improved risk management.
Innovations in fintech are replacing payment procedures. It has also made a profound impact on the real estate industry by making it easier for buyers, renters, sellers, and even firms to engage in easy, safe, and secure property management. There are many fintech companies that have emerged and have transformed or redefined the way the real estate industry works, some of the noteworthy ones being SS&C Technologies Holdings Inc., Fair Isaac Corp, etc.
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