As Gordon Gekko wisely said in the 1987 movie “Wall Street”: “The most valuable commodity I know of is information.” Of course, Gekko used information illegally and unethically, but that doesn’t make his remark any less true.
The information economy is upon us, and those organizations and professionals who learn how to gather and analyze accurate and useful information will have a powerful competitive advantage at their disposal.
There are lots of buzzwords thrown out there when it comes to information analysis. Big data is perhaps the most commonly used term, but regardless of how you refer to this growing phenomenon, I highly suggest that you don’t just discount it as just another tech fad.
Big data is changing the way companies make important decisions at every level of the organization. Recent technologies, such as Hadoop, are significantly increasing the rate at which information can be collected and analyzed, and data science is quickly emerging as one of the most in-demand professions of the 21st century.
Think I’m exaggerating the prevalence of big data in modern business?
- Retailers are using it to adjust pricing in near-real time.
- Airlines are using it to deliver highly personalized customer experiences and increase in-flight sales.
- Fast-food restaurants are using it to determine what to display on their digital menus depending on the number of patrons waiting in line at a given time.
- TV executives are using it to develop storylines and cast actors for shows. (I’m looking at all of you “House of Cards” fans out there.)
The list goes on and on. Even police are using big data to predict the time and location of crimes.
What about real estate?
In a recent news release by the National Association of Realtors, its managing director of data analytics, Todd Carpenter, advised Realtors to educate themselves about big data and embrace it. He said Realtors who do will add immense value to their relationships with clients.
As we have seen in other industries, real estate companies, mortgage lenders and the professionals who work for them can use and benefit from big data in several exciting ways. Here are just a few examples:
- Real estate agents can predict what type of homes best suit a customer before even talking or meeting in person.
- Lenders can use historical borrower data points to improve their underwriting methods.
- Loan officers can make better and more customized loan recommendations.
- Sales managers can better determine salespeople’s closing ratios across different customer segments. For example, which loan officers or real estate agents are better with first-time homebuyers?
- Technology experts can develop better products to address customer needs and remove process inefficiencies.
At MortgageHippo, we’ve embraced the power and potential of data analysis to refine our loan recommendation algorithm used to suggest loan programs to borrowers based on self-reported, anonymous data. We also constantly refine a borrower’s closing plan based on new data points provided throughout the process.
There is a myriad of ways the industry, its professionals and real estate consumers can benefit from the widespread adoption of big data practices.
Chances are, you’re already tracking many data points across your organization, but most companies can benefit enormously from the power of data analysis. It’s worth determining how big data fits in with your long-term goals and coming up with a plan to successfully implement a data strategy.
Valentin Saportas is co-founder and CEO of MortgageHippo, a mortgage technology company that partners with financial institutions to provide better online experiences to borrowers. You can follow him on Twitter @vsaportas.
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