Chairman and CEO Christophe Reech explores what elements of finance and real estate are set for the biggest transformation over the next few years, and what disruption is needed to drive it forwards.
What impact has COVID had on innovation?
COVID has demonstrated how resilient businesses in every sector can be in adapting to using technology, and in doing so it has accelerated the influence of data and AI to re-navigate and recover. It has also brought the concept of ‘antifragility’ back to the main stage: companies, individuals and nations are more focused on ensuring that their systems and operations are not only resilient but can thrive as a result of shocks and volatility. It has demonstrated how technological innovation plays a key role in enhancing the resilience of critical sectors such as finance and Real Estate at a time of major crisis.
What do you see as the biggest opportunities for disruption in the next 10 years?
The biggest opportunities are realised when companies can be flexible; stay on top of the changes and challenges in their industry and be prepared to adjust their strategies. Importantly, this is about identifying, accepting and removing anomalies that can deter this progress. Currently, we see the biggest scope for transformation in:
- The rise in open data: Governments are becoming increasingly savvy regarding their data. Taking the lead from big tech, there is a shift to making data more open to benefit potential customers. This will create a sector of innovative, private businesses that can commercialise this data to aid investors, regulators and developers.
- The rise of PropTech: the entire RE business lifecycle is shifting towards online, with investors using AR technology and big data to search and view properties and landlords using integrated systems to manage their property and tenant risks. The fact that Real Estate innovation is currently earlier on the J-Curve than finance in fact presents several advantages, leveraging technologies and resources developed for the fintech markets directly, amalgamating in a shorter development cycle.
- Robotic Process Automation (RPA): business process automation is confined mostly to tasks that are simple, manual, high volume and prone to human errors. However, RPA bots can use their advanced capabilities to handle time-consuming processing tasks such as client onboarding, data extraction and validation – simplifying and removing manual intensive processes.
- ESG data: more stringent ESG regulations from governments and higher demand for ESG disclosure from the market have placed more requirement on the quantity and quality of ESG data. Historically, both finance and Real Estate have operated using largely Excel and manual processes for origination and analysis. Big Data can enhance these processes, adding insights that previously would have been impossible to find with only human interaction.
- Small business lending: large and mid-sized commercial banks will continue to make up the core composition of small business lending, and consolidation between smaller community banks will continue as SMEs search for alternative avenues. Regulations will drive financial institutions to build better models to quantify their risk more comprehensively, and lenders will expand towards the use of alternative types of big data to evaluate risk.
- Blockchain and tokenization: blockchain and distributed ledger-related technologies will continue to be applied across capital markets to maximise tamper-proof connections while making data and financing more accessible. As digitisation and tokenisation fractionalises markets, regulators will simultaneously try to regulate and create structure within the crypto and DLT world.
Underpinning all of these areas is the opportunity of monopoly: the first-mover advantage. While some current market players have not yet been able to realise this, others that have leading technologies and strategies can become significant market leaders.
How does Reech Corporations Group help realise these opportunities?
Reech Corporations Group exists to engineer the previously Inconceivable ; to solve problems even AI experts didn’t think was possible. Our purpose is to recognise areas ripe for transformation, identify the anomalies in the market that are preventing this from being realised – such as legacy systems or lack of data – and remove them from the equation. We can help re-imagine whole industries across finance and Real Estate.
Why is RCG best placed to do this?
We have aggregated four key talents in one place: mathematical & data modelling expertise, understanding of technology and AI, opportunism and vision. This makes any tech solution possible in the first place – and then we know how to commercialise it.
The leaders of our businesses across the Group are also industry pillars. This means they bring an understanding of, and respect for, certain traditions and networks that we can combine with AI to digitise the infrastructure from the inside out. We are partners and we take a long-term view, scaling and empowering businesses over the years for both companies and investors. If some of these businesses remain in the Group portfolio for years and become multi-generational, we have done a good job.
How can others work with Reech Corporations Group to partner in driving this forward?
We believe that the biggest opportunities can be achieved with collaboration, enabling the wider ecosystem of innovation. If others spot an opportunity in a particular market but cannot find a way to realise it, we will find a way to do that – whether through execution, strategic or operating partnerships. In this way, we can partner with family offices, corporates and sometimes Institutions seeking the next big opportunity, combining the necessary capital with our unique approach and expertise to transform and commercialise.
What geographical markets are leading the charge when it comes to digital disruption?
There is huge potential for digital disruption in Europe. Reech Corporations Group has a particular focus on Germany, a market that is not only growing faster than its European neighbours, but faster than the European market as a whole. We also foresee huge opportunities in the MENA region, which is increasing the digital adoption to diversify revenues from oil and energy.