Why PropTech and MortgageTech Are the Future of Fintech

If this is the first time you’ve heard the term proptech, it won’t be the last. Proptech (also known as real estate tech or REtech) and its subset mortgagetech have been around since 2014. Here’s why 2017 is poised to place proptech among the ranks of wealthtech, insurtech, regtech.

This year has already been favorable to mortgagetech and proptech companies. SoFi, for example, is about to close a massive, $500 million round, its competitor LendingHome topped $1 billion in mortgage loan originations last year, and RealtyShares has seen over $300 million raised on its platform. According to CB Insights, since 2012 the real estate technology sector has closed 817 deals worth $6.4 billion. Of that amount, $2.6 billion closed in 2016 alone, which represents a 40% increase from that sector’s funding in 2015.

In the U.S., there are a handful of reasons 2017 will be favorable to real estate. Interest rates are projected to rise for the second time, millennials are starting to buy their first homes, and investors are looking to diversify out of the volatile stock market. On top of all of this, regulations are slated to loosen under the Trump administration, and changing in regulation brings opportunities for innovation.

Players

The broader category of proptech can be broken down into four basic segments.

1- Mortgagetech
These are mostly B2B companies specifically focused on facilitating part of all of the mortgage application process. They do not lend or service the loan.

2- Digital mortgage lending companies
These online lenders facilitate the mortgage application process and service the loan.

3- Real estate investment tech
Companies in this category are focused on the investment aspect of commercial and residential real estate.

4- Pure property plays
These don’t have a fintech angle but play a role in the broader proptech industry. Since this category is out of scope for this blog, this list only encompasses a fraction of companies in this category. Check out CB Insights’ coverage of commercial real estate technology for more.

What’s ahead in 2017

  • Expect to see more mortgagetech-bank partnerships along the lines of Roostify’s recent deal with JP Morgan Chase. As banks try to gain a competitive edge for market share, more established banks will need to leverage mortgagetech offerings.
  • We’ll see more niche alt-lending solutions such as SoFi that facilitate the application process and save borrowers on closing costs.
  • Expect to see more players offering real estate investment technology, coupled with some consolidation in real estate crowdfunding companies.
  • Outside of fintech, we’ll see more platforms aimed at cutting out the middle person, the realtor; and more business models such as Knock and GoldenKey that make the selling process easier.

You don’t have to take my word for it

We posed the question, How do you see proptech/ mortgagetech growing in 2017? to these Finovate alums working in the space. Here’s how they responded:

BhatRajesh Bhat, CEO and cofounder of Roostify:

“We expect to see further widescale adoption of digital mortgage solutions – to the point where one should expect it to be table stakes in 2018. We should also expect to see more players emerge in the space as investors see larger market adoption and validation.”

 

Screen Shot 2017-02-23 at 9.52.53 AMLinda Schicktanz, Chief Advisor of CK Mack*:

“If there is one area ripe for fintech innovation, it’s real estate investing. Why put 30% down just to gain massive management headaches when you can now invest in rental cashflow online with very similar returns? Fintech and Real Estate are like peanut butter and jelly, they just go together!”

Screen Shot 2017-02-23 at 8.30.31 AMNima Ghamsari, cofounder and CEO at Blend:

“There is going to be an explosion in the use of data driving the mortgage process in 2017. Both Freddie Mac and Fannie Mae have announced their data initiatives toward the end of 2016, and lenders are starting to push consumer financial data aggregation into the core components of their customer experiences. This ties in nicely to the industry-wide push forward to a more digital, end-to-end process that started in 2016.”

Screen Shot 2017-02-24 at 4.07.54 PMJilliene Helman, CEO at RealtyMogul

“The impact of digital technology on the real estate industry and mortgage technology is still in its infancy, but I see both less experienced and more sophisticated investors, alike, moving toward a process that takes place entirely online. With over $250 million of capital invested and 100,000 registered investors on the platform, RealtyMogul.com is a testament to this change. The more that technology can offer real estate borrowers and lenders transparency, as well as the efficiency of process and convenience, the faster both sides will adapt.”


*Full disclosure: I’m related to Linda Schicktanz. Yup– she’s my mom.

Finovate Alumni News– April 25, 2013

  • Bank Independent picks Jack Henry Banking’s SilverLake technology for enterprise-wide automation.
  • TSYS Merchant Solutions launches Pay in Your Currency multi-currency solution.
  • CommunityLend earns spot on Branham300’s Top 25 Up and Coming companies roster.
  • ID Analytics introduces new version of Credit Optics Credit Score for more insight into consumer behavior.
  • Kofax ranked a “Leader” by Forrester Research in The Forrester Wave report.
  • AGBeat features Kabbage. Check them out at FinovateSpring.
  • Kony Solutions announces record year in FY2013, growing 90% YOY. Hires Abhay Parasnis as President and COO.
  • Mobile World Live takes a look at Zooz’s recent funding round. Meet Zooz in San Francisco as they demo their technology as part of FinovateSpring.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

eyeOpen Acquired by Aegon (Transamerica)

Thumbnail image for eyeOpenLogo.jpg

Slap a “SOLD” sign on one of the pioneers of the online mortgage advisor business.

eyeOpen, which launched its solution in February as part of FinovateEurope, announced that it has been acquired by Aegon. Terms of the deal were not disclosed.

Aegon is a global, multinational insurance, pensions, and asset management corporation. Headquartered in The Hague, Netherlands, the company does business in the United States and Canada as Transamerica.

eyeOpen’s mission to build the “next level of personal finance optimization” so far includes their online mortgage advisor which puts algorithms to work helping consumers manage their personal finances.

The company is also a B2B business that sells data-extensive algorithms and software to banks and insurance companies to improve their own personal financial service offerings to their customers and clients.

eyeOpen_art.jpg

eyeOpen was founded on Christmas Eve in 2009. The company, with offices in Amsterdam and San Francisco, has raised €10 million in funding, and has served more than 1 million customers in 2012 through its eyeOpen.nl financial portal.

The company is led by CEO Diederick van Thiel, and counts Aegon Investments among its key financial backers.

To see eyeOpen in action, visit our video demo page for FinovateEurope 2013 here.

eyeOpen Debuts Digital Mortgage Advisor

This post is a part of our live coverage of FinovateEurope 2013.

eyeOpenHiLogo.jpg

Afterwards, eyeOpen launched its Digital Mortgage Advisor:

“eyeOpen launches world’s first digital mortgage advisor. In an age when banks and insurers strive for consumers’ trust, digital leadership and true customer centricity are the weapons of this service. 

The personal advice algorithms are ‘the crème de la crème’ of personal mortgage advice. eyeOpen offers its service as a SaaS-solution to banks, insurers and advisor companies in Europe and the United States. The benefit: extreme cost reductions, smarter targeting and incredible NPS-improvements.”

Product Launch: February 11, 2013
HQ: Amsterdam, The Netherlands & San Francisco, CA, USA
Founded: December 24, 2009
Metrics: eyeOpen raised €10M funding to scale up its European activities. The company serves the European markets from its Amsterdam office with 35 employees. eyeOpen serves the U.S. market from its San Francisco office. The website eyeOpen.nl is the Netherlands’ leading independent financial portal serving over 1M customers last year. On the B2B side the company licenses its technology platforms on digital advise, ratings, reviews and budgeting apps.
Website: eyeOpen.nl
Presenting Diederick van Thiel (CEO) and Rosali Waleson (CCO)
IMG_1427.JPG
IMG_1428.JPG

FinovateEurope 2013 Sneak Peek: Part 1

FEU13Logo.jpg

For our first ever two day FinovateEurope conference, we’ve selected 64 of the most innovative companies in fintech to demo their newest technology to an audience packed full of banking executives, press, analysts, bloggers, and more.
Each company provided a sneak peek of what they’ll demo next month. Below is the first installment of these teasers. We’ll have more next week.
Don’t miss your chance to see the live demo from each company and be a part of our FinovateEurope conference at Old Billingsgate Market Hall in London on February 12 and 13. Get your ticket here.
______________________________________________

AcuityTraitwareLogo.jpg

Mobile devices are rapidly taking place of credit cards and visits to the bank. How can you have confidence that the user on the other end of that high value transaction is who they say they are? TraitWareID
So why not learn more about a comprehensive authentication solution specifically configured for applications with mobile users that offers a versatile, single, integrated approach that does not require additional hardware?

Innovation type: Identity, payments, security

Thumbnail image for BBVALogo.jpg

Everyone knows the importance of social networks in the financial world. Millions publicly discuss their experiences with the different brands they interact with throughout the day. It also applies to the financial markets. Investors, large or small, share their views on the main market securities and how emerging news influences their trading. 
And of all the social networks, Twitter is probably the most widely used for this type of analysis. But, is there any chance to analyse the conversations about stocks and to obtain a sentiment? We will show you that is possible.

Innovation type: Online

Thumbnail image for BiletuLogo.jpg

Biletu is the new way to organise events and share expenses between friends, family and colleagues.
Innovation type: Mobile, PFM, Rewards

Thumbnail image for CardlyticsLogo.jpg

Cardlytics is a real-time marketing and analytics platform that enables over 350 banks globally to bring profitable, targeted rewards to their consumers. Cardlytics’ latest innovation is an integrated Facebook app, containing a rewards summary page showing a customer their available offers. Launching in 2013, this will allow banks to have a meaningful and valuable customer conversation in social. 
Watch as we demo creating the Facebook-to-Customer relationship, preserving customer privacy through our patent-pending OPS & OMS systems. Once the link is made we will demonstrate the targeted rewards and savings earned for a customer through the Facebook interface.

Innovation type: Mobile, online, rewards

ComarchLogo.jpg

Comarch will showcase two solutions, which work together guiding customers from the interpretation of their transactions to suggestions of products and services that can really help them improve their financial standing. Comarch solutions use multiple motivation techniques to help customers achieve financial fitness through sound personal finance management.
Innovation type: Investing & asset management, mobile, PFM

Thumbnail image for Thumbnail image for DashlaneLogo.jpg

Dashlane, winner of Best of Show at FinovateFall in NYC 2012, will demo their core technology: a consumer app (desktop and mobile) that enables users to instantly checkout, login and fill forms in a flash universally on every website and every device, without the need for any site-side integration with merchants whatsoever. 
In addition to being a secure personal data management tool and the “point of payment choice” for users, Dashlane offers financial services and ecommerce partners a privileged seat next to the user during all their online transactions.
Innovation type: Payments, security

Thumbnail image for ERNLogoNEW.jpg

Big Data. Pretty much the two words that are on everyone’s lips, but much harder to actually put into action… until now, that is. 
ERN will show you how our unique, big data technology platform brings together card payment and merchant data in real time. Using that data and insight, we’ll show you how (at last) you can intelligently target loyalty programs and marketing campaigns effectively. Better still, there’s even a smartphone app to deliver your customers eReceipts and mCoupons.
We look forward to showing you how you can close the loop on payment Big Data and create value from every single transaction.
Innovation type: Mobile, payments, rewards

eyeOpenLogo.jpg

eyeOpen is launching the world’s first digital mortgage advisor. The digital mortgage advisor provides consumers with best-in-class mortgage advice. It provides banks and insurance companies with a leading user interface in conversions, advice algorithms and a management information dashboard on consumer behavior.
eyeOpen tested the digital mortgage advisor in The Netherlands with leading banks such as Rabobank, ING and ABN AMRO. The company sells the consumer advice software in Europe from its Amsterdam office and in the USA from its San Francisco office. 

Innovation type: Back office, banking, marketing

EZBOBLogo.jpg

EZBOB offers real-time financing for e-commerce businesses in the UK. The company has developed a web-based lending platform which gathers data, in real-time, allowing for instant lending decisions. 
An e-commerce business is analysed based on data pulled through API connections to data sources such as Amazon, eBay and PayPal, as well as strategic partners such as Channel Grabber, EKM and others. 
EZBOB’s proprietary algorithm allows the company to look beyond a traditional credit score. 
Innovation type: Banking, identity, lending, PFM, small business

FinancialSimplicityLogo.jpg

Learn how Financial Simplicity’s portfolio business management infrastructure enables wealth firms to operate thousands of individually tailored investment portfolios efficiently and compliantly. 
It will reveal how portfolio management can blend new world social relevance with operational excellence. Specifically, Financial Simplicity will demonstrate:
    1. Whole of firm portfolio mandate and compliance monitoring in a single screen
    2. On-demand portfolio analysis within a socially relevant context
    3. Investor-tailored portfolio modelling at the click of a button
    4. Implement pre-compliant portfolio decision-making across a Centralised Investment Proposition in a matter of seconds
Innovation type: Investing & asset management

Thumbnail image for Thumbnail image for INDGroupLogo.jpg

Story of My Finances is an entirely new approach in digital financial customer service. It takes online banking and PFM to the next level of mass retail financial planning and advice. 
Stories are customer-driven financial life processes, such as How to spend less, Prepare for a rainy day, Buy a home or Retirement planning. Stories help end-customers to get financially fit and to have a peace of mind. Stories are the missing link between everyday people and financial products. 
We believe that we can improve people’s financial life by licensing our white-label technology to financial institutions.
Innovation type: Online, PFM, sales

ITSectorLogo.jpg

You’re seated comfortably watching TV, and suddenly you’re notified that a bank deposit was made into your account. Good news! Simply click, and you can see the details.
The Home Shopping Network presents the set of cooking pans that you have had your eye on for ages. With the press of a button, the pans are on their way to your house!

Innovation type: Marketing, online, sales

KalixaHiLogo2.jpg

Kalixa believes that today, payments simply don’t meet the real needs of consumers and businesses. For businesses payments are expensive, fragmented and leave them exposed. 
Ed Chandler, CEO of Kalixa, will showcase how next-generation technology that underpins a total payment journey can transform payments from a source of cost, complexity and confusion into a sustainable competitive advantage that stimulates innovation and fuels business growth.

Innovation type: Cards, payments

KantoxLogo.jpg

We truly believe that the financial industry needs a radical rethink and that innovative financial services offering fair prices, transparency and creating no systemic risk are more important than ever.
Based on these conclusions, we developed an alternative to traditional FX products and services offered by banks and brokers. Kantox is a marketplace where companies can look for and find others companies – their counterparties – to exchange foreign currencies spot and forward without the intermediation of banks.
Innovation type: Payments

Thumbnail image for LuminousLogo.jpg

Luminous’ BankFiling loan origination solution enables financial institutions to increase lending to banking customers, while reducing risk.
Innovation type: Banking, lending, small business

T
humbnail image for Thumbnail image for EfigenceLogo.jpg

mBank & Efigence present the first European comprehensive Bank 3.0 revolution in a large bank with a full financial product portfolio. 
mBank, an online bank, has successfully leveraged the internet to organically become the third largest in Poland. Now, it’s re-inventing itself by bridging startup-grade innovation on a mass scale. It will implement a wave of next-gen services: transactional banking, transactional/real-time marketing, PFM, social, gamification, video banking, mobility and more. 
It will show its innovative transactional site and the first European implementation of transactional marketing, highlighting a creative take on Facebook, social platforms and real-time consumer gratification.
Innovation type: Banking, online, rewards

MovenbankLogo.jpg

Movenbank will be the first consumer banking experience centered around mobile and enabling a consumer’s everyday financial wellness. We combine mobile banking, mobile payments, and real time financial health and spending insight to help customers spend, save and live smarter. 
Consumers pay with their mobile phones and receive insight on their spending behaviors at the point of sale when it matters most. When was the last time your checking account did that?
Innovation type: Banking, payments, PFM

NICELogo2.jpg

Your customers want a mobile service that is as smart as their device. Are you delivering? When customers use your mobile service, they often require assistance beyond self-service to resolve their needs. Having them realize they now need to call your contact center and start from scratch with the IVR causes disappointment and frustration. 
NICE Mobile Reach complements mobile self-service to bridge it with assisted-service channels. It lets companies intelligently engage their mobile customers, seamlessly connect them to the right representative with full context transfer, and then powerfully collaborate with them during the interaction. That’s smart customer service that creates value!
Innovation type: Communications, mobile, sales

TESOBELogo.jpg

The Open Bank Project (OBP) is an open source-powered API for banks that enables account holders to access their transaction data using a wider range of applications and services. 
The OBP API supports transparency options (enabling account holders to share configurable views of their transaction data with trusted individuals and even the public), data blurring (to preserve sensitive information) and data enrichment (enabling users to add tags, comments and images to transactions). The OBP App Store enables banks and developers to showcase supported apps.
Innovation type: Back office, communications

Thumbnail image for SAGELogo.jpg

The new, highly volatile market order that’s been prevailing for the last few years is raising the pressure on you to come up with asset allocations that are precisely fitted to your clients’ profile. Clients increasingly challenge the proposed investment strategies’ ability generate performance while preserving wealth. 
The BlackSwan Financial Platform lets you engage your clients in an interactive analysis of their risk. Explore investment options together with your clients and guide them through an informed process in selecting the most optimal asset allocation for their profile using clever quantitative finance algorithms.
Innovation type: Investing & asset management

TemenosLogo.jpg

EdgeConnect is the industry’s most dynamic user experience platform (UXP). EdgeConnect provides a single, consistent platform that enables superior user experiences to be delivered across multiple distribution channels, for any product, any user, in any language and optimised for each device.
A major new editor within edgeConnect, LiveDesigner, is a game-changer in application design. It allows designers to change the look and feel, layout and behaviour while an application is executing, so that they can make changes and see the effects on dynamic application pages prior to live deployment.
Innovation type: Mobile, online, sales

Thumbnail image for TheCurrencyCloudLogo.jpg

The Currency Cloud transforms the way businesses make international payments.
 
We inject cost savings, transparency and productivity enhancements into the payment process to deliver a service businesses deserve. Our platform connects to a host of exchange rate providers and payment networks to optimise the conversion, sending and receiving of international payments. 
Businesses access our service directly online, through our API, or via the multitude of firms such as banks, brokers, remittance agents, IFAs, and accounting solutions providers that extend our capabilities through their own services.
We will be showcasing the power of integrated international payments within treasury solutions.
Innovation type: Back office, payments

Thumbnail image for Thumbnail image for TrueOfficeLogo.jpg

Could the banks have avoided over $1 billion in fines for anti money laundering violations with this True Office game?
By playing the True Office | Thomson Reuters Anti Money Laundering desktop and mobile app, financial services employees are exposed to the regulatory risks they confront, and learn how to comply with anti money laundering laws and company policies. 
The data generated from this app provides financial services institutions with compliance analytics that help identify and reduce instances of anti money laundering risk.
Innovation type: Mobile, security

TSYSLogo.jpg

TSYS Spend Controls puts control over card usage into the hands of the business owner or program administrator. It provides businesses a means to implement upfront transaction controls to ensure cardholder compliance with purchasing guidelines. 
Administrators manage parameters using a simple Web-based user interface, establishing guidelines according to business, department or individual needs. Each transaction is reviewed at the point of sale based on the pre-established parameters.
Innovation type: Banking, cards, marketing

Thumbnail image for Thumbnail image for VirtualPiggyLogo1.jpg

Virtual Piggy is the first e-commerce solution that enables kids to manage and spend money within a parent-controlled environment. 
We deliver online security platforms designed for the Under 18 age group in the global online market, and also enable online businesses the ability to function in a manner consistent with the Children’s Online Privacy Protection Act (“COPPA”) and similar international children’s privacy laws.
Innovation type: Payments, PFM

VoiceTrustLogo.jpg

VoiceTrust inTalk increases customer convenience, reduces call times, and provides enhanced security at financial institutions’ call centers. It does this by verifying a customer’s identity through passive listening to the conversation between the agent and the customer. 
Independent of the language spoken or the words uttered, inTalk is able to compare the speaker’s voice against the account holder’s voiceprint and indicate whether the speaker is the account holder or an imposter. The agent is alerted with a graphical indicator on their monitor.
Innovation type: Identity, sales, security

YseopLogo.jpg

Yseop will present several intelligent text-generating financial solutions. We will demo a prep-to-meeting report written in two seconds, an automatically generated two-page financial executive summary based on the latest market data and a personalized retirement planning application. 
Yseop is artificial intelligence that writes (and speaks) non-repetitive intelligent text, just like a human being, but at a speed of thousands of pages per second. Yseop analyzes a company’s business data, dialogs intelligently with its customers to understand their goals and then generates written comments and recommendations following the best practices of the company’s top experts.
Innovation type: Communications, sales, marketing