Proptech stands for ‘property technology’, meaning technology that is used to optimise the way people buy, sell, and manage real estate. Proptech is an intersection of financial technology (fintech), construction technology (contech), smart real estate, and shared economy. Proptech affects the buying, building, and selling of houses, or management of rental properties. It also applies to hotels and short-stay shared properties, like Airbnb's. Examples of proptech are the use of virtual reality technology and drones for online house viewings, and remote digital mortgage applications and signings through the services of digital mortgage providers. These all fall under the umbrella of proptech solutions.
How has proptech changed the real estate sector?
Innovations in fintech and other services have changed the landscape of the financial sector perhaps forever, and this same spirit of innovation is now influencing the real estate industry. At its core, proptech is focused on updating outdated and frustrated processes to meet the expectations of a generation of digital native home buyers and improving the experience for all parties involved. Proptech creates:
- Automated processes, reducing time, paperwork, and costs
- Direct digital engagement and reduced physical contact
- Easier data collection and marketing
- Removal of geographical boundaries for communication, viewings, and purchases
- Secure communication that cuts out the middleman
Why is proptech growing?
The increased usage of proptech isn’t due entirely to natural innovations in the industry. A large driver of change was the COVID-19 pandemic, which created a perfect storm for a shake-up of property purchasing processes. Behind the scenes, tech like big data analysis by AI and other smart property management solutions are keeping companies innovative and up to date However, consumers are looking for the same advantages from these innovations too. As young buyers enter the housing market, they’re looking for a fast and convenient way to purchase their home. This is enabled by remote mortgage applications, remote signatures of deeds and other important documents, and virtual reality property showings. The market is yearning for a fast, easy, and secure way to conduct their real estate dealings.
A survey by ICE Mortgage Technology confirms this demand. As the President of ICE Mortgage Technology highlights, "Covid highlighted the need for a single consistent digital experience for consumers". The pandemic has permanently altered the way consumers use technology, and that those looking to lend or buy a home are now seeking lenders who offer online tools and services.
"Covid highlighted the need for a single consistent digital experience for consumers."- President of ICE Mortgage Technology, Joe Tyrell
Lenders, brokers, and marketplaces of all kinds should consider creating a one-stop-shop solution for their customers, with 74% of borrowers who have gone through the mortgage process in the last 2 years believing that an online mortgage process would make buying a home easier than an in-person one. Furthermore, 3 in 5 borrowers reported they were influenced by whether the institution offered online mortgage applications (60%), online portals for uploading documents (59%, and online portals for electronically signing and notarising documents (60%).
How does remote identity verification fit into proptech?
Remote identity verification allows industries of all kinds to comply with Anti-Money Laundering and Know Your Customer regulation by verifying their customer’ s identities in a secure way from anywhere in the world. There are several forms of remote identity verification, including video verification, Optical Character Recognition (OCR), and Near Field Communication (NFC). Each technology has their own advantages and disadvantages, but for an industry as heavily regulated as realm estate, NFC is ideal due to its unrivalled security.
Inverid provides award winning remote NFC identity verification solution ReadID to many industries and sectors, including real estate. ReadID’s identity verification can fit into a proptech solution’s architecture in:
- Listing and marketplace access
- Digital mortgage applications and financial evaluation of buyers
- Remote digital signing of documents
ReadID has been used by customers like ThirdFort for digital mortgage applications that can be verified without the need for a wet signature or the physical presence of the signer. As displayed by the results of ICE’s survey, the smartphone-minded generation expect nothing less than a seamless digital journey.
ReadID has been proven to work with over 2600 models of NFC-enabled smartphones from iOS 13 and Android 7 and newer. With chipped identity documents now being issued by over 170 countries, coverage for your customers to purchase property no matter where they are in the world keeps growing. Inverid undertakes extensive user testing to inform best practices for our User Interface and User Experience team to create proven best practices. Dynamic placement animations provide assistance for users throughout the verification process based on their smartphone and document type, even down to where to place the document’s chip in relation to the smartphone’s NFC antenna.
Digital pension solution provider Hyfen uses ReadID for elderly customers to provide proof of life when collecting their pension abroad, proving that NFC-based identity verification has no age limit. Not only can ReadID speed up the purchasing process for end users, but it also ensures service providers have maximum compliance with KYC legislations and other forms of regulation.
NFC technology itself is highly secure, as advanced cryptography and security mechanisms such as Clone Detection allows us to identify documents that may be inauthentic. Furthermore, the information inside the chip is read 100% error-free by ReadID, meaning there is no need for manual data correction by your staff or customers. Inverid is the most certified provider in the identity verification industry and is frequently audited and pen tested to meet your company’s compliance needs.