If you’re following business updates and everything tech-related, chances that you’ve encountered the term “big data” in the recent past are pretty high. Big data has been a topic which has been associated with a variety of business sectors, ranging from eCommerce and, recently, everything legal. Of course, the real estate industry, especially when financially related, isn’t an exception. Let’s analyse how the usage of data-driven technologies could change the world of real estate in the nearest future.
The Concept Behind Big Data Oriented Real Estate
Big data, per definition, is a numerical value which is associated with a specific (or multiple) user and/or keywords. The association of these numbers with specific users is what’s known in the data science industry as a “data point”. With this being said, the application of big data strategies within the real estate sector is quickly explained: when applying for a mortgage, a bridging loan (for residential purposes), many automatic application systems were ignoring important values such as demographics, age, health and other forms of loans but, with the use of big data, it’s easier for online banks to automatically and precisely approve or decline small, medium or large loans.
Risk Mitigation: A Keyword Which Will Reshape The Real Estate’s World
As mentioned above, the usage of big data when approving or declining mortgages (and any form of finance, really) has become quite important in the recent past and, after Santander announced its first blockchain-based bond, we can safely say that this technology is definitely approaching a more “mainstream” market, instead of just being confined to the fintech’s world. Risk mitigation is a quite commonly used term which refers to the usage of specific data orientated strategies to deliberate if the loan provider is allowing a successful or unsuccessful finance plan. In a financial world with dozens of forms of finance available, this is pretty much a groundbreaking application of this technology.
Some Mortgages-Related Applications
The biggest use of big data-related technologies happens within the microcosmos known as “corporate acquisition”. Big data, when correctly set into place, could give precise indications on a company’s financial situation, with precise predictions on their future and, therefore, an easier picture on “why we should acquire/decline this acquisition”. Of course, this could be easily transposed to mortgage-related processes, especially when done from big corporations to acquire/rebuild/renovate fields or specific properties: “we’ve checked with our analysts, taking this mortgage/bridging loan isn’t going to benefit us as the risk is pretty high”. Although very safe to use when a proper data science division is set into place, this can’t be applied to processes like compulsory purchase order, which limitates the usage of big data, following GDPR.
The usage of big data within the real estate sector is pretty much building its foundation at the moment. Although it has been stated multiple times how the entire segment could massively grow once data science will be acknowledged by a more “mainstream” business scene, we are still at a very embryonic stage.