In this week’s interaction session, Moneycontrol’s Jinit Parmar discusses about ICICI Bank’s real-estate platform comprising various physical and digital services and technologies designed to aid developers, buyers, AIFs and REITs. He discusses this with Sumit Sanghai, Head- Large Clients Group at ICICI Bank. The real estate sector, as you know, was badly hit during the pandemic but bounced back strongly in the following months thanks primarily to new, disruptive technologies and improving internet access.
Note: Responses have been edited for brevity. Watch the full video below for more insight into these sectors from one of the industry’s leading experts.
Q . You had STACK for the corporate sector previously. What inspired you to create something similar for the real-estate sector?
The real-estate sector is one of the fastest growing sectors in the country, contributing to 7% of the GDP. Post-pandemic demand in the real-estate market has been very high, which has led to people focusing more on the importance of owning a home. There has been new regulations added to this industry like RERA. With RERA in place, this sector has become more transparent and organised, thanks to the technology, which has resulted to the boost in consumer confidence. This has ultimately led to shorter delivery timeline to the home buyers.
To cover the entire life-cycle of stakeholders, ICICI Bank took an ecosystem approach. The stakeholders include not only buyers and builders, but also Alternate Investment Funds (AIFs), Real-Estate Investment Trusts (REITs), and other related entities. STACK is designed to account for everyone.
Q . What sort of services can clients avail from the platform?
STACK is a first-of-its-kind initiative offering 360 degree solution for the entire real estate ecosystem. It starts with the needs of the homeowner, focusing on areas like pre-approved home loans with competitive rates and instant digital sanctioning. For developers, STACK helps in opening RERA accounts digitally, and includes customised collection solutions for pre- and post-launch management of projects, including a single dashboard for seamless collection and refund of all the projects.
Other aspects such as construction finance and lease rental discounting are also covered. Primarily, both customers and developers benefit from the speed and convenience that STACK offers them. It is very quick and we are leveraging the technology to see how we can create value for the customer. For example, we offer services like digital collection, reconciliation, and surplus distribution as add-on offerings for REITs and AIFs.
Q. Speaking of technology, what is phygital? Could you elaborate on it?
Phygital refers to a combination of both physical and digital. The whole objective is to provide solutions for the entire ecosystem, to make the journey of the customers seamless and convenient. As part of this process, most of the steps have already been digitised.
Of course, a certain amount of physical documentation is still necessary when it comes to property management. The Bank already has a strong branch distribution channel making it easier to facilitate these physical parts of the processes, which are the physical aspect of phygital.
ICICI Bank has always been in the forefront in offering innovative, effective and distinctive value propositions to its customers. The Bank has curated personalised services, which customers can avail through physical and digital medium, resulting in a more streamlined and accessible customer journey.
Q. Looking at the Bank’s real-estate portfolio, what trends have you seen in the past?
If you look at the data, the top seven cities still constitute more than 80% of residential sales in India. In terms of absolute size, these top seven cities still dominate, but we have seen that the demand from the tier two and tier three cities on the home loan side is very robust.
There is a lot of consolidation happening on the developer side, pointing to an increase in the foreign capital as well as investments from private equity players. I think the growth momentum is there across the country, but the top seven cities still constitute a significant part of the residential sales in the country.
Q. Coming back to STACK, what are some of its features and how is it different from other competitive platforms?
Our STACK is a one-stop solution that streamlines the journey all the way from construction to the home buyer. It enhances the operational efficiency by integrating multiple customer journeys. It gives an integrated ‘one-view’ of all the RERA escrow accounts via a single login ID for better fund management, and so on.
STACK also allows for complete customisation of pre- and post-launch business processes, including a customised MIS for seamless reconciliation buyer wise and project wise. Essentially, it’s a faster, more streamlined, and more intelligent system for managing the real-estate business.
Q. Lastly, how do you see the real estate and banking sector working together?
If you look at needs of India today, every family needs and aspire a home. The banking industry needs to work closely to ensure that we fulfil the aspirations and needs of these families, and developers need to focus on working with the right parties to serve the customer best.
We try to ensure that we facilitate home-buying for every family in India, that’s what we aspire to do. I think there will be growth momentum across the country both on the developer side as well as the home-buyer side. When the real-estate sector does well in India, so will do the ancillary sectors around it. They are inter-dependant, and growth in these sectors directly impacts the economy, incentivising the various sectors to work together.
Cohesion is important as this is clearly about raising the quality of life of families.
Q. To summarise, what you are saying is that co-existence is key for the banking and real-estate sectors to work in cohesion in order to fulfil the goals and ambitions that customers have?
Yes.
For more information on India’s banking and real-estate sectors, as well as STACK, please watch the full video.
Moneycontrol journalists were not involved in the creation of the article.
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