Digital Trends - Investment Management Companies
In the recent years, technology has played a crucial role in disrupting many brick-and-mortar business models, including that of the real-estate industry. In this environment, many individual buyers and sellers have started riding the digitalization wave and consider technology to be a growth driver. We explore several of these top trends based on reports in reputable online sources on technological news.
The trends in digital innovation within investment management specializing in real estate and debt investment include:
Chatbots are conversational customer-service agents which can provide answers to simple questions or seamlessly connect customers to live staffers in more complex situations. Aspect Software Research found in a study that "44% of consumers" preferred customer service provision by chatbots over humans. This is attributed to their ability to leverage company data in order to provide more specific consumer assistance and 24/7 availability. The efficiency of chatbots in performing "routine, repetitive tasks" means automation at stages such as the initial agent-prospect contact point is likely to generate higher lead conversions.
Virtual reality promises visitors a more genuine and immersive experience of properties which can be conveniently viewed and shared with friends and family through remote technology. This can help expedite the buying process, which is favorable to both agents and customers. While companies are advised to consider investment returns from AR and VR technologies, 73% of homeowners in a 2016 survey indicated an increased willingness to list with realtors providing video services.
While drones are currently being used more for security and surveillance, they are increasingly being turned to by real estate professionals for marketing photography and/or videography, especially in the case of large properties challenging to photograph from ground level. For vendors, drones incorporate an "exclusive perspective" into home promotion; for buyers, drone shots allow for more rapid examination of a property and its surrounding areas.
Consistent with the rest of society, the market to buy homes is moving online, 80% of home buyers search for — and 44% make an eventual purchase of — homes online. In 2017, 58% of buyers were reported to find their homes on mobile, specifically. This has resulted in a surge of mobile apps and marketing for a more targeted approach. The prevalence of the internet also means that most potential buyers now approach real estate agents having done "their homework ahead of time"-such as the 51% of home-buyers researching video home tours on YouTube-increasing the incentives for agents to acquire unique industry market or neighborhood knowledge to differentiates themselves from competition.
5. SOCIAL MEDIA
Social media, such as Facebook, Twitter, and LinkedIn, is becoming a prime tool in real estate for both networking and advertising. Agents are recommended to use social media for its intended purpose of connection (as opposed to "shameless promotion"), by engaging followers with "questions, … tips," and "relevant information", only occasionally mixing in "open houses and listings." However, the marketing tools offered by social networks may presently be under-utilized: currently, 91% of realtors use social media to some extent, but only 9% use social media for the purpose of marketing their listings.
Blockchain is a technology which can validate and append all transactions to a public ledger. These emerging services reduce the waste associated with physical documents and signing and can directly incorporate financial transactions with cryptocurrency. In 2017, Velox RE and the Cook County Recorder of Deeds initiated a pilot project storing the property records for its 5.2 million residents (including Chicago) using Blockchain technology.
IoT refers to the Internet of Things and speaks to the "Smart Home" revolution, replete with internet-connected electronics controllable with handheld mobile devices. Smart Homes definitely have the potential to add value through increasing comfort and consolidating home data, and real estate companies marketing IoT enabled homes are being touted as having given the opportunity to "rewrite how luxury is experienced."
While real estate has made a major jump into the digital media world especially for clients, there has been somewhat of a lag on the supply side. While space has been created for emergent corporations capitalizing on the resources offered by technology, the traditional large players in the real estate and debt investing space of investment management, which tend to be conservative in their approaches, have varied in how rapidly they have incorporated these innovations into their corporate protocol.
Currently, Blackstone is the world's largest real estate private equity firm managing $115 billion in assets. One of Blackstone's key tenets is to capitalize on the opportunities presented by technology, given its "profound effect" on the "global economy." Per this goal, Blackstone has a devoted technology team appropriately titled Blackstone Innovations. The team strives to maintain a competitive advantage for Blackstone through using technology at its "rapid pace of development" and protecting the organizations' data from increasingly sophisticated cyberattacks.
PGIM is the real estate investment business associated with Prudential Financial, Inc. Interestingly, the president and CEO of PGIM, David Hunt, holds a bachelor's degree in engineering from Princeton, in addition to his MBA in finance and multinational management from Penn's Wharton School. However, PGIM does not explicitly reference their strategic response to these emergent technologies on their corporate website.
Compass is leading the way with creating the first modern real estate platform that will allow real estate agents to make "intelligent and seamless" the search, sale and/or purchase of real estate for their customers. The conceptualization of Compass is as "the Pinterest of real estate", through enabling home buyers and agents to discuss, organize, and collaborate on hand-picked properties, in an effort to better streamline the transaction-engagement process and understand buyer behavior.
The top digital trends seen in real estate include: artificially intelligent chatbots, home tours through augmented or virtual reality technology, the use of drones to capture videography or photography and protecting data with Blockchain servers, whilst embracing a range of social media from Facebook Live and Pinterest to Compass which is touted as the “Pinterest of real estate.”