Millennial Demand for Efficiency, Security Fuels Fintech Innovation
February 11, 2020
Title agents and real estate professionals believe demand for greater security and efficiency will be key drivers for greater fintech adoption in 2020, according to First American’s latest Real Estate Sentiment Index.
To meet this growing demand, First American chief economist Mark Fleming said title agents and real estate professionals plan to adopt specific fintech soon. The survey found that 67 percent of respondents intend to adopt these technologies in the next 12 months and nearly a third of title agents and real estate professionals will require software support within the next six months.
“Fintech applied to the real estate transaction can streamline time-consuming processes, increase security and improve the home-buying experience for potential home buyers,” Fleming said. “The fintech revolution is here, and it is here to stay in real estate.”
Security remains a priority with the threat of wire transfer fraud continuing to grow. The survey showed that 35 percent of respondents considered secure collaboration and communication portals between all parties to the real estate transaction the most important.
“One of the major trends affecting the real estate industry may explain why the 2018 and 2019 survey findings were consistent—the rise in wire fraud,” Fleming said. “Survey respondents indicated that buyers would benefit greatly from a secure platform that allows them to correspond with lenders, real estate agents, escrow officers, and other parties involved with the real estate transaction.”
With homebuyers wanting a more efficient closing process, the move from traditional, wet-signed documents to a paperless closing will continue to evolve.
“It’s unsurprising then that 28 percent of percent of title agents and real estate professionals surveyed believe that hybrid e-closings will have a large impact in helping home buyers close their transactions faster and more efficiently,” said Fleming. “Since many documents need to be signed in a real estate transaction, a hybrid e-closing means that many documents may be reviewed and e-signed in advance of the closing, while some documents must be wet signed in person. The benefits? A faster and more streamlined closing experience, and reduced risk of manual errors, just to name a few.
Additionally, 17 percent of title agents and real estate professionals surveyed believe that remote online notarization will have a large impact in helping homebuyers close their transactions faster and more efficiently.
Another 11 percent of title agents and real estate professionals indicated that tools for process efficiency and the automation of routine tasks, such as customer service chat bots, would help deliver a more efficient home-buying experience.
“With techy savvy millennials looking to buy their first home, the concept of ‘responding too fast’ does not exist,” said Fleming. “With more and more prospective home buyers searching for homes and information online, chat bots can help real estate agents engage with potential customers as they are browsing online listings at any time of the day. Additionally, chat bots and voice-based virtual assistants can help answer customer questions instantly, providing a more efficient home search process.”
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