Get Some Tech in Your Title
There seems to be a buzz around the title insurance world concerning new technologies. From file cabinets in the basements of courthouses to multi-platform closing systems, the title industry has gone a long way to modernize. Like many changes in the industry, there are pros and cons to the addition of new technology. On the pros side: closing, title, and settlement services may become more consumer friendly, possibly making real estate transactions faster, easier, and more affordable. On the cons side: industry professionals will likely need to adapt at the speed of tech, which can be a daunting task. The combination of these factors has increasingly exposed the nearly $14B title insurance sector to a fairly wide variety of FinTech startups and tech forward title companies.
In this month’s blog, we will be discussing technology in the title insurance space and its effects on the market. Particularly:
- The factors driving the need for technological advancement such as comfortability buying and closing online, the need for faster closing processes, and the ability to meet 100% of demand.
- How startups are addressing the need for technological development in title.
- Ways in which organizations can embrace new technology and incorporate it into a successful operation.
Who’s in the Driver’s Seat?
First, we must address the elephant in the room: Tech is here, and frankly, it is here to stay. So, let’s look at some market factors driving technology development in the title insurance industry.
Millennial Online Home Buying: One factor driving the need for better technology is millennials’ entrance into the home buying category. Now more than ever, processes are moving online, and many new homebuyers seem ready to appreciate an online closing process.
Speaking of Online Closings, in response to an interest in online homebuying, several platforms have come out to address the need for remote services. If you are interested in learning more about the technologies coming out to assist in the closing process, the above article might help provide you an understanding of software on the market.
Meeting Demand: Although 2020 and the beginning of 2021 were great for the Title Insurance and Real Estate markets, technological development might be a way to even further expand the industry to meet the demand of homebuyers. Home purchases and refinances have been increasing since early 2020 and as laid out in this article by Deloitte, the numbers behind tech’s effect on ability to meet that demand look promising.
Start-Ups Stepping In
As many companies are focusing on servicing the massive amount of market demand, many simply don’t have the appropriate amount of time to invest into in-house technology development to address the needs of new home buyers. That's where venture-backed tech startups often come in. Tech Start-Ups are finding a new home in the already $14B and growing Title Insurance industry. Through creating software to speed up/simplify the closing process, these start-ups are designed to focus on servicing demand. But it is not just venture-backed tech sails that are catching the changing winds in title, many agencies and underwriters are beginning to develop their own teams to shape the industry's movement forward.
Although it is a blooming part of the business, the next challenge for technology in title may be integration. It's one thing to bring a new platform or software into your operation, it's another thing for that technology to enjoy the soft embrace of your organization’s people. With the recent major shift back and forth from remote to in-office work, many companies are asking how long-term tech integration will last. However, as technological adaptations such as electronic signing and cloud-based title software become commonplace, the more return on investment Title Companies should get from their recent technology upgrades. As a blog from the American Land Title Association has suggested, there are four steps that every organization should keep in mind when integrating technology into their business operations.
- Understand habits: changing over systems and integrating technology is a long process and the changes will take some time to become common practice.
- Include the team: making sure your team is part of the decision to integrate technology is a huge step in the process. Knowing the strengths of your current system and how the tech will affect those strengths is invaluable information.
- Follow up: checking in and setting milestones may make the tech transition much easier. Leaving open lines of communication and setting dates/times for integration will keep you on track and smooth over the difficult process.
- Ease in: don’t try to change your tech in the first week of integration. Taking slow and clear steps is the best way for your organization to properly function in the transition period between systems.
What does this mean for you?
Tech is not yet a sink or swim proposition in the title industry. It is not as if tomorrow any company without a dedicated team of coders will fall behind. Yes, tech is becoming more prevalent, and with the success of the title industry in 2020 and thus far in 2021, some experts are asking the age-old question: 'if it ain't broke, why fix it?' Either way you stand on this subject, it is an interesting “follow” during exciting times within the title insurance industry. It seems in this golden age of home purchase and refinances, growth opportunities are often just around the corner, and here at Anderson|Biro we will keep our ear to the high-speed rail to help stay in touch with new and exciting talent.
Should you have any questions, please feel free to drop a line and one of our team members will be happy to hear your thoughts.