In our modern world, the majority of our business functions, personal interactions, healthcare, and other day-to-day occurrences are happening via very modern technologies. However, commercial real estate lending is one area where our current practices are very much behind the times.
Commercial real estate lending has not been updated in decades. In fact, in 2019, 43% of US banks still used COBOL, which is a programming language invented before the internet, therefore it is not easily compatible with modern technology.
While residential lending has embraced new technologies that have kept it on target with modern functionality, commercial real estate is seriously lagging behind. Today, 92% of residential borrows begin by researching lenders online. Seventy-four percent use an online portal to communicate with their lender, and 43% complete their entire application online.
Commercial lenders, however, have been slow to adopt new technologies and they’re beginning to be left in the dust. Alternative lending platforms, such as Crowdstreet, Fundrise, and Yieldstreet are on the rise, and they may eventually overtake traditional lenders whose methods are less convenient and modern.
Commercial lenders need to embrace technology and change the face of lending in order to stay in the game. Learn more in the infographic below.