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Oxane Partners: real estate finance sector is primed for digital transformation, survey reveals

Oxane Partners, a leading technology-driven solutions provider to alternative investments industry, has released its Real Estate Finance Technology Report 2019 which reveals that real estate debt investors in the UK and Europe are still evolving in digital maturity and technology adoption but there are good indicators that point to near-term, far-reaching progress and that the sector is primed for digitalisation.

In the report, Oxane Partners explored the digital ecosystems, awareness mapping, priorities and drivers for technology adoption that is underway in real estate finance. Oxane Partners surveyed 75 senior real estate debt professionals across the UK and continental Europe and found that while Microsoft Excel is still the mainstay with the majority relying on manual processes, the respondents tellingly admit that Excel has outlived its utility.

Kanav Kalia, Director at Oxane Partners, explains:

“The rise of real estate debt as an attractive investment option and the expanding universe of non-bank lenders means increased competition in the market which is driving the need for efficiencies in evaluating opportunities, deploying capital and managing investments. To address these challenges, we have seen start-up debt funds as well as large institutional managers inclining towards digitalisation to meet rising expectations of investors as well as to stay competitive.”

The survey reveals there is high awareness of technology solutions as well as consistency amongst respondents on solutions most valuable to them. Most respondents cite data aggregation, data management, and analytics – the foundation of all modern technology platforms as their top most priorities.

The responses reflect that the industry has begun contemplating about technology solutions more seriously and with rising expectations around compliance, transparency and reporting, is set to embark on its journey of digitalisation.

Vishal Soni, co-founding partner at Oxane Partners, explains:

“We have seen first-hand how firms are able to completely recalibrate their strategic and operational priorities and drive better performance with the use of technology. We believe the real estate debt industry is approaching an inflexion point and expect significant digital maturation over the coming 24-36 months.

“This will be driven by three intertwined forces – increased technology requirements of real estate debt professionals, increased transparency driven by continued institutionalisation of real estate debt as an asset class and a rapidly rising opportunity cost of simply maintaining the status quo. The challenge for technology solution providers is to build platforms which allow easy integration with existing systems and are flexible enough to host complex bespoke real estate debt transactions.”

Other key findings from the survey include:

  • Digital maturity remains low across the board: Over half the respondents rate themselves 5 or lower (on a scale of 10) in technology maturity, with the score dipping further as assets under management cross the £5bn mark.
  • But switch-over to technology tools is underway: Technology solutions have made significant impact into some of the critical business processes, notably: (i) pipeline management (36%); (ii) investor reporting (38%); and (iii) portfolio and risk management (40%).
  • Business-fit over off-the-shelf products: Business-fit is deemed most critical in the selection and adoption of a technology solutions with a near unanimous score of 87%.
  • Business automation and AI/ML trump blockchain: Artificial Intelligence (AI)/Machine Learning (ML) (60%) and business automation (56%) trump blockchain (29%) by a big margin.

james.wallace@realassetmedia.com