The Housing Finance Sector and Their Need for Geospatial Analysis | Data Sutram

The Housing Finance Sector and Their Need for Geospatial Analysis

FinancialLocation IntelligenceRetail
Barnika Bhandari

Barnika Bhandari

July 15, 2021

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Ineffective utilization of data has been a problem that has long plagued the efficient functioning of organizations and this is especially pertinent in the financial services sector. Procurement of ground-level data is a resource and time-consuming process, the quality of which may often be compromised upon due to unavoidable errors. This is where the combination of business analytics and geo-data comes into play, to yield optimized results after careful analysis of trends and domain-specific patterns.

How is it relevant to the housing finance sector?

The housing finance sector would especially appreciate the valuable insights geo-data brings with it, as it is a sector greatly influenced by location-driven customer behavior. To elucidate, here is a theoretical flow of operations:

  • Information about new and upcoming projects in a particular catchment
  • Assessing the economic activity of the population residing nearby
  • Relaying this information to banks and loan providers

How do all the factors synergize together?

Simply put, once banks acquire the location insights and behavioral trends of people in a certain area, they can personalize their loan offers to customers who fit the criteria to be eligible for housing loans.

  • For realtors and brokers, geocoding can be immensely helpful to decide upon which property sites to sell to which customer demographic.
  • Profiles of various sites for construction projects can also be compared by banks, allowing room for risk mitigation.
  • Physical inspection and proximity risk are important for underwriting and location intelligence rules out surprise elements that may appear during the actual on-site inspection.
How location intelligence and housing finance can work together

Which services offered by the housing finance sector shall be benefited by geo-data?

Some services offered by the housing finance sector which can greatly benefit from geo-data would include:

  • Top-Up Loans: Calculation of maximum amount up to which top-up loans can be given by analyzing spend pattern and affluence of the locality of the property
  • Commercial Premise Loans: Calculation of loan amount can be done similarly as that of top-up loans
  • Lease Rental Discounting: Banks can calculate the market value of property in accordance with the neighboring locality, and offer suitable discounts to owners approaching them

Increasing Geo-Relevance

  • Personalization of offers meted out to customers: Allows expansion of customer base and better interactions
  • Elaboration of neighboring networks and amenities: Allows customers to clearly understand their requirements and approach banks for suitable loans

Identification of potential off-market land opportunities: Allows investors to assess, along with factors such as market valuation and environmental policies, the favourability of a potential land investment

Geospatial analysis is a great boon to housing finance services and real estate investors, as granular insights can be obtained quickly and subsequent patterns can be studied. The utilization of location data in various domains to drive growth and transformation is not as far-fetched an idea as it may have seemed earlier, and its adoption is a sure-shot way to stay ahead of the curve in making well-informed decisions.

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