Authored By: Pulak Jain Co-founder, Chief Business Officer and Head Strategy, TransBnk
In the current digital world, the Proptech sector is transforming the real estate sector significantly by making transactions smoother, efficient, and user-friendly. To unleash the prop-tech sector’s full potential, it is crucial to leverage transactional banking services for seamless financial management and hassle-free consumer experience in the real estate and property technology industry. Below are some key ways in which transactional banking and technologies can be leveraged for success in the Proptech sector.
Digital Payments and Transactions
The integration of digital payment solutions into Proptech platforms is crucial to facilitate real-time transactions between all parties involved in real estate, be it buyers, sellers, tenants, landlords, brokers, etc. Digital payments simplify the process of buying, selling, and renting, given their features like quick, less time-consuming, and transactions done from anywhere. For example, online rent payments and automated invoicing features drive out the hassle of monthly physical rent collection, hence bringing down administrative hurdles for landlords and making the experience for tenants hassle-free. Moreover, secure payment gateways help secure the users’ financial information and away from the potential risk of phishing during the transactions.
Escrow Services
Escrow services elevate trust in real estate transactions to be done through transactional banking. Escrow service providers help hold funds securely as the neutral mediator until both parties’ agreed-upon agreement conditions are met. Notably, escrow services drive out the risk of fraud and regulatory non-compliance, to create a win-win situation for all involved parties. Escrow services are usually considered to safeguard the flow of cash in complex or big-ticket real estate transactions like the sale of property. The transparent process of holding onto funds until all contractual obligations are met induces confidence among both buyers and sellers.
Application Programme Interface (API) Integration
The strategic integration of banking APIs into Proptech platforms helps users to access information related to fund transfers, balance inquiries and account verification in real time. It opens up more features to be accessed by the users of the Proptech platforms like instant loan approvals, and much more. For instance, with banking API being integrated into a prop-tech platform, a potential buyer can verify their account balance or receive a pre-approval for a loan without requiring them to toggle between multiple apps and websites, thereby speeding up the transaction process.
Data Analytics and Insights
Transactional banking is a treasure trove of data about consumer behaviour and buying preference which can provide potential insights into market trends and help proptech platforms to elevate their financial performance. With the help of this data, Proptech firms can use these pieces of data to personalize their services, forecast market shifts, etc. For example, inferring payment data can help proptech platforms understand highly sought-after types of properties or forecast season-based trends in rental demands, and adjust their listings accordingly.
Automated Settlement
Running automated settlement processes helps maintain precise financial records. By automatically matching transactions on Proptech platforms with bank statements, firms can bring down manual discrepancies, save time, and uphold compliance in terms of financial protocols. This automation helps optimize operational efficiency and build trust with users with the provision of a real-time transparent log of financial transactions.
Fraud Detection and Prevention
Given the large ticket size or bulk transactions that the proptech sector sees daily, there is a need for tools to detect fraud and prevent any potential financial or sensitive information loss to the users. By incorporating advanced banking technologies and algorithms as an added layer of security, Proptech platforms can identify and alleviate fraudulent threats before they affect consumers and their money. These technologies help in identifying suspicious transaction patterns, authenticate the identity of transaction parties, and notify users of potential security breaches/risks, hence protecting the integrity of the platform.
Customized Financial Products
Partnerships with banks to create tailor-made financial products like flexible financing options, customized lending solutions, and investment products to meet the diverse needs of the Proptech sector can offer a significant competitive advantage. These specialized products can help Proptech companies attract a broader user base and meet the varied needs of customers.
Transactional banking and allied new-age technologies bring an array of advantages to being integrated with Proptech platforms to create a fast, safe and transparent environment for diverse real estate transactions. Leveraging digital payments, escrow services, API integration, data analytics, automated reconciliation, fraud detection, and customized financial products, Proptech firms can help streamline their operations.
