August 21, 2015
Big news to hit the real estate sector recently is real estate and rental marketplace Zillow's acquisition of dotloop, a digital transaction management firm. While this is exciting for members of the real estate industry, the pairing will actually have a more widespread impact.
Now under Zillow, dotloop will be able to grow its document management technology - and that technology can be leveraged in other industries (especially financial services) as well.
What is dotloop?
In order to understand the impact of dotloop, it helps to know exactly what dotloop does. If you've ever bought or sold real estate, you know exactly why dotloop was created. There are countless paper documents involved, and all that documentation has to be shared between buyers, sellers, agents, brokers, lenders, insurers and so on.
It's a lot to manage, and for the professionals involved, it requires a lot of faxing, emailing and driving back and forth for signatures. With dotloop, this process is digitized. For each deal and client, all the relevant paperwork is displayed right on the dotloop account. Every party has access, and can "pass" the forms around for review and signatures.
The idea of digitizing the process isn't new, but dotloop has found a creative way to do it - and they've caught the eye of real estate giant Zillow in the process. And that could mean that this technology reaches a wider audience, not to mention gets enough funding to grow into other spaces as well.
Tech could benefit financial services
The one area where dotloop doesn't work is with mortgages, according to American Banker. It handles all the other documented processes of the real estate transaction prior to that, but it stops at this final segment.
According to American Banker, the fact that dotloop doesn't address the mortgage process has raised questions in the industry. Specifically, whether or not dotloop will eventually expand into this realm, thanks to Zillow's financial support.
"It is probably a great opportunity for Zillow to expand its capabilities," Mark McElvoy, the CEO at a Texas-based firm that is similar to dotloop, told American Banker.
The potential of dotloop to grow into mortgages is something that is exciting for financial services. If the technology can handle the mortgage process, it could very well be repurposed for other uses.
Time will tell
However, there are some hurdles to the expansion of dotloop into other industries. According to American Banker, regulations make it tricky to convert all documents and signatures online.
The same can be said for the sheer size of some transactions. A lot of paperwork can make it challenging for dotloop, and the technology will have to be stress-tested and reinforced to accommodate a new, larger purpose. Even so, dotloop has great potential. With the backing by Zillow, the technology shown here may have a positive impact on the future of the financial services industry.