Real estate is an investment category that your banking customers engage with again and again throughout their lives. With the following approaches and strategies, you can incorporate it holistically into your advisory processes—to strengthen the customer relationship, and to optimise the customer experience.

On a financial level as well as an emotional one, no other investment occupies bank customers as intensely as owning a house or flat. No wonder, then, that in many banking clients’ portfolios real estate is the largest and most long-term asset class.

Banks, insurance companies and financial service providers have recognised the advantages of integrating real estate data into customer interactions as a core element of the advisory process. This can bring benefits such as:

• Easier customer communication and messaging

• Improved customer engagement and customer satisfaction

• Stronger customer relationship, loyalty and retention

• Up- and cross-selling potentials
  
  
  
  

In this article, find out how this integration can succeed and how real estate data contributes to the long-term future of banks, insurance companies and financial service providers.

Real estate emerges as one of the most relevant customer experience trends

In times of digital banking, FinTech, price wars in retail banking, high product comparability and rising customer expectations, the competitive pressure on financial service providers, insurance companies and banks is ever rising. Well thought-out products alone no longer guarantee customer loyalty. In order to stand out in this challenging market, it becomes increasingly important to optimise the customer experience. A decisive factor: Whether and to what extent banks, insurance companies and financial service providers are able to generate added value for their customers, both in terms of service and the quality of the advisory process.

This is confirmed by a PwC study, among others. It showed that an overwhelming majority, three quarters of those surveyed, see the customer experience as relevant to the purchase decision. Still, only 55% were satisfied with said customer experience. To improve this ratio, the most successful institutions in the finance and banking industry are willing to take this customer feedback into account. This requires a change of perspective. Instead of the classic reductive approach of "Which products fit our customers?" they are ready to ask: "What moves our customers? And how can we support them even better?”

For the individual customer’s pain points, real estate plays an undeniably relevant role—both as an opportunity and a challenge. Mapping customer needs and including them in customer communication gives the financial sector the opportunity to win new clients and retain them, as well as maximise revenues. For financial service providers, investing in this area means no less than investing in the future.

Reliable real estate data more important than ever

Real estate markets across Europe have entered a moderately volatile phase. Germany, for example, experienced a long, almost 13 year-stretch of low interest rates and housing shortages, all but guaranteeing a profit on real estate investments. However, as analysts at Deutsche Bank correctly point out, that stretch is now decidedly over. Similarly, Bloomberg reports that UK investors and homeowners are nervously eyeing flatlining house prices, intently hoping another boom and bust cycle can be avoided. In this challenging market climate, reliable data and precise forecasts for individual cases are required for the financial sector and its clients to make profitable decisions.

The value of a share portfolio can be verified at any time. Why not the value of real estate?

When it comes to their share portfolios, clients have grown used to checking performance and current balance on their own device at any time. With real estate, whether their own home or an investment property, the digital customer experience is much less straight-forward. Property owners are dependent on third parties for a reliable valuation, either via an expensive appraisal or an accommodating estate agent. The customer experience around buying, owning and selling real estate is therefore all too often characterised by a lack of transparency. It then suffers even further due to the intense stress associated with life-altering decisions on housing.

Thanks to digital transformation, however, financial institutions are now able to automate this process. This means the opportunity to give themselves and their customers access to metrics and real estate data at any time. As part of a holistic customer experience management, this can create customer-centric touchpoints, enabling financial service providers to tailor their support to clients’ needs and stand out from the competition.

Customer experience and real estate: how to integrate successfully

When real estate is integrated holistically into the financial services ecosystem, real success stories emerge. French start-up Finary, for example, aims to track all of its users' investments in real time via a single platform. Real estate posed a major challenge for this venture.

Still, founders Mounir Laggoune and Julien Blancher found a solution. “55% of Finary assets are tracked by PriceHubble,” Laggoune explains. Millions of data points feed into PriceHubble's tools. With the use of artificial intelligence algorithms, these tools can then determine the value of any given residential property with high accuracy and in real time.

For Finary, this has become a deciding factor for their competitive advantage, especially against traditional banks. "It allows us to set ourselves apart from competitors, offering our clients the potential to create a more accurate estimate of their properties," says Laggoune.