FinTech development has affected practically every industry, so much so that it’s impossible to imagine a future without it. One in particular that will never be the same is the commercial real estate (CRE) industry.
The Financial Foundation of CRE
Have you ever wondered where the funding for buildings like shopping malls, parking garages, office spaces, or skyscrapers actually comes from? If you work in real estate, you probably already know that buildings like these are most likely the result of CRE lender financing.
When thinking about it from this perspective, how could CRE lending not be disrupted by FinTech? Similar to how peer-to-peer lending has changed consumer loans, advancements in financial technology have led to a number of new alternate options for those seeking a loan in CRE. As a result, CRE financing has become optimized in a plethora of ways.
CRE Lending Made Simple
FinTech has expedited CRE lending as well as the underwriting process. Before, the application process for a loan used to take weeks. Now, it usually takes applicants ten minutes to fill out the paperwork and only one or two days to receive an answer from the lender. The closing stage and due diligence also experience a boost in speed as well.
But speed isn’t the only factor of CRE lending that FinTech has improved. By incorporating technologies like artificial intelligence (AI) and blockchain, FinTech has brought unprecedented simplicity and transparency to CRE as well.
AI algorithms sift through immense amounts of data faster than any human can, and with fewer errors too. It’s not unusual for AI to do most of the legwork in determining if a candidate is approved or not.
The security that blockchain brings allows sellers and buyers to operate with more confidence. The technology is quickly becoming a staple across numerous sectors of FinTech for this characteristic trait. As in other industries, blockchain fosters new business because it makes first-time transactions between strangers fail-safe.
Still a Work in Progress
As advanced as FinTech is getting, there are still some facets of CRE that evade its grasp. For instance, underwriting a loan has factors that can’t be quantified simply with just numbers. For now, FinTech is a powerful tool for humans to utilize in the CRE lending process. It’s not a complete replacement.
Still, the benefits a CRE professional get from FinTech augment their insight in ways never possible before. It’s hard to believe that this is just the beginning of FinTech development’s relationship with real estate.Tags: AI, AI App Developer, AI App Development, artificial intelligence app development, blockchain in business, business, commercial real estate, fintech, fintech app, FinTech app developer, FinTech app development, fintech disruption, real estate