PropTech - The Journey Continues
The Property industry is taking a hard look at itself in the mirror as it imminently faces the question of how technology can help alleviate its legacy problems. The archaic structures of the sector now stand primed for change as innovations in blockchain, AI and big data begin to be leveraged to automate traditional paperwork, processes, governance and regulatory frameworks. As the PropTech ecosystem seeks to build a more cohesive and seamless experience, several prominent topics have started to emerge:
The importance of building a connected and collaborative ecosystem
Whilst the sector is growing at a rapid pace, change in the industry will be incremental as restrictions and regulations from larger institutions diffuse the pace of transformation. Productisation is not the barrier for entry for PropTech; instead the challenge is how new businesses partner with traditional firms.
As these two sectors start to merge and interact, leaders are now facing the test of how they provoke greater collaboration between conventional structures and modern technologies. Where ‘ivory towers’ have tried to block out innovation in the past (e.g. Uber and TfL), the demand of the customer tends to come out on top so institutions should now start thinking about how they can better partner together. For many businesses this will mean creating a ‘new normal’; redefining job descriptions, working habits and locations.
Getting smarter about using data without threatening privacy
For true collaboration to occur, leaders need to demonstrate the benefits of sharing data. Where Nordic businesses have been more open in the way they share data, the UK seems to be taking longer to collaborate. Across the property value chain, businesses are often reticent to share data out of fear that they’ll lose their own personal IP and client base.
Whilst nobody seems able to decide whether this data belongs to companies or individuals, many leaders affirmed that the value of most services in the Property industry derives from their own personal, advisory skills as opposed to the data they possess.
90% of the world’s data was created in the last two years, yet under 1% of that was analysed. Not only does the Property industry needs to think about how data can be collected more collaboratively, it also needs to get smart on data analytics to enhance how it is interpreted. Breakthroughs in data standards have been made, but now is the time for businesses to start thinking about how they use them.
The threat of technology to jobs
There is a tendency for traditional property firms and estate agencies to feel polarised by technology companies in the space, often feeling threatened that their jobs stand at risk to automated process.
The industry seems to have good faith that this is a misconception as people skills are the market differentiators. Instead of automating jobs to extinction, the mood music from tech companies is that their innovations will help traditional firms get back to proper, advisory human interactions where technical parts of the process are automated, but value resides in a person’s ability to analyse that data and give quality advice to their client.
Traditional players in the market currently continue to be the leaders in the space; they are signing the highest volumes of transactions and are yet to experience or voice any concern of negative disruption to their jobs.
The rise of FinTech has not removed bankers’ jobs; if anything, it has sparked innovation in banks to create their own APIs. Similarly, the growth of smart contracts in the legal profession has not removed lawyers’ jobs and by the same token, the adoption of new technologies in the property sector seeks to modernise, enable and enhance jobs. There is a still some way to go for the PropTech dream to be realised, but with tenacious commitment from iconoclasts in industries old and new, the PropTech phenomenon has asserted its market position and is here to stay.
This insight is derived from a recent roundtable we co-hosted with Orrick, which brought together some of the most prominent PropTech leaders to discuss how their sector is growing. Companies in attendance included: Ask Porter, Barclays UK Ventures, Breather, CBRE, Concrete Venture Capital, CreditLadder, Datscha,GYANA, Infabode, Notting Hill Genesis, OneDome, Pavegen Systems, Pi Labs, PropCoin, Property_Partner, Reapit and Settled.