Deloitte, the consulting and auditing conglomerate recently published a report on how blockchain can help in the Commercial Real-estate industry to fight fraudulent cumbersome procedures.
Delloitte Center for Finance Services, take a look at Blockchain and what it can do for the future. Just as in the trading, travel and hospitality, and health industry, as well as the supply chain and in government institutions, blockchain is set to revolutionize CRE operations. But, what truly is the potential that Delloitte recognizes in the technology?
Blockchain can remodel the view stakeholders have in CRE operations by developing new methods for property transaction, data storage and transparency. As discussed in the report, according to a 2015 World Economic Forum survey of 800 executives, 57.9 percent of the respondents see blockchain storing 10% of the total global GDP by 2025. But the fact remains in that the technology´s application is still in the experimental stage, where Deloitte has identified certain CRE challenges that have the possibility of being solved with their respective blockchain solution.
In the report, Deloitte has pinpointed 6 obstacles currently prevailing in the Commercial Real Estate sector including time consuming, paper-driven, predominantly offline due diligence and financial evaluation process, high title insurance and related costs due to chain of title and lien recording issues, fraud risk, required diligence, and cumbersome clearance process, slow, expensive, and opaque financing mechanisms and payments, especially in cross-border transactions together with an already existing blockchain solution developer working on establishing a remedy.
And yet, just as Blockchain could prove to be a cost-cutting, time-saving, transparency-providing technology, Deloitte warms readers that if not implemented correctly it could rather increase costs. Also, while it is mentioned to be a solution to various difficulties, it is not a solution to all difficulties, neither in the CRE industry, nor in other ones where the application of blockchain is being experimented in.
With this in mind, the report advices anyone with the interest of forming part of this nascent movement to first educate themselves and their company of the rising technology, decide on whether creating or collaborating is the best option, and facilitate the implementation of the blockchain solution being provided.
As every harbinger of change, the risk carried by innovation is at any time high, but so is the risk of adaptation, the difference living in that while one is reversible the other one isn’t. The concept of blockchain as a harbinger in the CRE industry has not yet been explored to its utter depth; nevertheless, what has Deloitte indeed explored is the capability, potential, and ability to leave all stakeholders in expectancy of the possibilities.