REIC (Real Estate Intelligent Cloud)

Company Partner
UX and UI
business development
AlixPartners is a global consulting firm that helps businesses across multiple industries to manage complexity and to solve business challenges. The financial services team at Alix have partnered with the team to address an issue that cuts across real estate lenders worldwide: How can we make real estate mortgage lending more effective and personalised to the specific risk profile of the loan?

Towards Intelligent Lending

The goal of the project has been
to develop a dashboard for lenders
that increases loan effectiveness and
delivers forward looking insights,
benchmarking and early warning
signals for potential defaults.

Creating the platform

Working together, through a structured process of product study, scoping, development and testing, we have created a platform that tailors the risk assessment process so it accounts for a more holistic view of both the specific asset supporting the loan and the individual borrower profile. The platform – the Real Estate Investment Cloud (REIC) – revolutionises the risk assessment and monitoring phases of real estate lending using a combination of big data and AI, with a user interface designed to facilitate rapid decision-making.

Uniquely, REIC goes beyond looking at traditional property valuation assessment criteria (such as the size of the building and past valuations or sale prices) to assess forward-looking price trends, both in the district and in the town or city the property is located. This means lenders can assess not just the current value at risk, but the potential future value should there be a default and they are left holding an asset.

On the borrower side, REIC looks beyond the traditional assessment of an individual’s current income and ability to repay the loan, to look at prospective income based on the borrower’s industry and role. By taking a long term view of ability to repay, the lender can make more informed LTV decisions.

Transforming lending through the REIC Dashboard

The result is a dashboard for lenders that supports intelligent lending throughout the underwriting process, with ongoing risk monitoring and a global view of portfolio performance. This opens opportunities for lenders to not only become more effective in their loan decisions, but also to add value through:

Match-making. Banks can proactively match-make customers with suitable properties; advising not just on a house to live in, but also a financial asset to invest in longer term.
Instant lending. Banks are able to pre-approve mortgages based on matches made.

More realistic pricing. Existing risk-based pricing is driven by current asset valuations and the current status of the borrower, rather than the expected future dynamics of both. Synapse provides the tools to price on future expectations rather than a moment in time.

“REIC is an example of how partners to create solutions that are relevant, critical and pragmatic in nature. With a number of “use cases” designed and implemented across most financial services functions, they are certainly a “one to watch” in transforming this most global - but also fairly traditional - industry.” Claudio Scardovi, AlixPartners Managing Director
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