Proptech and the future
Proptech, at its simplest, means property technology. Proptech began after the dot com bubble burst in the early 2000s. Various outputs were sought for the use of the Internet in order to increase capital, and since real estate is the industry with one of the highest turnovers, it’s rather logical that attempts were made to enter that market in particular.
At first, it was difficult to attract money from investors and the amounts were modest, but a decade later it was already in billions. The first players emerged in the US and UK markets, but in Scandinavia rental space was already offered, at that time chaotically, for example using virtual 3D technology for tenants to tour inside the buildings etc.
Today, as a decade has passed again and PropTech has become a very high-potential international business, inter-twined with the previously established FinTech and RegTech, and with probably the youngest of them, InsurTech. It is not necessary to explain the meaning of these abbreviations to the reader, but the possibilities of use might.
As for FinTech, PayPal probably doesn’t need an introduction. It is one of the first, if not the very first, large international FinTech company with more than 200 million users and with it’s logo on nearly a million financial websites around the world. In essence, financial technology, or Fin-Tech, deals with the automation of financial services in a way that is useful and as hassle-free as possible for both the buyer and the seller.
As in many other IT areas, many players in the PropTech sector today focus on exploring, interconnecting, and expanding the applications of AI, IoT, and Big Data. The goal is still security and more accurate decisions. If your computer could semantically process billions of keywords or pictures per minute and handle the result securely, it’s a big step forward. That’s the future as we see it.
Physical security is always one of the key issues in real estate. All owners and managers, regardless of the size and location of the buildings they own, are always concerned about who, when and how uses them. Until recently there were security cameras, that recorded events on the ground. This required a lot of manpower and the material was recorded over and over. In most cases the longer-term supervision was very limited or it was completely absent. Now servers and artificial intelligence processing large amounts of data are already able to solve this problem. This is one of the possible key roles of AI and Big Data in the real estate market.
Today’s comprehensive physical security PropTech solution also includes the use of security hardware (Edge AI). In the past, physical security systems could only be used to respond to threats. With the integration of artificial intelligence into real estate technology, a new era has arrived meaning it’s engaged already in prevention. This provides an opportunity to link the insurance service (InsurTech). And with the authorities, the aforementioned RegTech, which is used by both financial and regulatory authorities to manage complex compliance processes and control.
All parties benefit from the development of PropTech – PropTech enables owners, landlords and managers to manage their assets more flexibly and efficiently, and also creates better opportunities for tenants, even in the form of mobile key cards. At the same time, Regtech makes a significant contribution to making paperless reporting more convenient and transparent. All in all, it works for the best possible experience for tenants, which in turn is also the goal of landlords.
Digitalisation in the real estate market allows tenants and property managers to be more independent and make better decisions without having to spend a huge amount of time and resources on a large number of bureaucratic requirements and regulations. This leaves PropTech companies with more room for innovation and that means good news for everybody!
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