Professional standards and regulation in the digital age: what can RICS do?

The PropTech sector, although growing rapidly, is currently unregulated. That was the focus of the initial meeting of the RICS Data Standards Leaders Forum, held at RICS headquarters in Parliament Square and chaired by Andrew Knight, RICS International Data Standards Director.

The forum brought together members of the RICS Tech Affiliate Programme (TAP) to explore the need for common data standards across the entire property lifecycle and RICS' role as a standard-setter and regulator.

Data behaviour

The forum considered ethical issues around data collection and use. Individual data about end users can be incredibly useful, allowing the industry to produce a better product and experience. Yet access to this individual data is often limited. One attendee commented that a line in the sand needs to be drawn between when data is truly inclusive and when it is being used for the benefit of the end user.

The group agreed that data, whether individual or collective, is asymmetrical at present: one member noted that in the construction industry, the main contractor business model is largely predicated on withholding information. This allows contractors the opportunity to maintain distance between clients, advisors and those working at different tiers.

If sharing data across a project is asymmetrical, sharing data across the sector is even more difficult. Andrew Knight is certain this will change. He said: 'The idea you can hide information about an asset will degrade as people expect to have the right and ability to share this data. There will be a drive for more sharing of data whether people like it or not; presently, the behavioural barriers to this are bigger than the technical ones.'

Data sharing across the sector will unlock the potential for more informed project decisions. It will also allow a better skills exchange between the increasing number of tech start-ups in the industry, and the bigger, more traditional companies.

Data transparency

One attendee spoke about harmonising data accessibility and use across the industry. Making data open to all would ensure that companies earn money for their service – what they do with the data – rather than how much they possess.

Andrew Knight commented: 'I've spoken to professionals from other asset classes, such as listed equities, who have noted that making money from how much data you own about real estate assets would potentially look like insider dealing if translated into their world. The asymmetry of data is not sustainable in the long term. Part of the maturity of the industry is realising it can't be so opaque to all participants.'

What if data becomes freely available, but people pay for the analytics and science that turn it into valuable information? This would give tech companies in the industry a clear definition and purpose, removing the potential for profiting from a lack of transparency.

The forum agreed that 'small' and 'big' can better collaborate to reach common goals. While the tech start-ups possess the technical knowledge and offer innovative solutions for dealing with data, the bigger companies provide the resource and bandwidth to make sense of and act on the findings.

Data quality

Data quality is vital if this model is to work, yet the discussion concerning this raised more questions than answers. While the group agreed that everything is based on good-quality data, which is ultimately reliant on the source, they asked:

• Should there be a vetting process for data? Should this process lie with the company or the body that analyses it?
• If data forms part of a report, who owns the data and who owns the report?
• Who owns the data if you've hired a professional to gather it?
• What comprises good data?
• How does the data help other organisations that combine business sets improve ina business sense, while remaining ethical?
• What risks arise when relying on others to provide you with data?
• What happens if you use the data for something other than its original purpose? Is it ethical to re-use or repackage data?
• Can data be split into categories – for example, 'core' data, such as raw business metrics like house sale prices that are available to everyone, and 'outer core' data, such as the business advantage data?
• How do you define your data standards as a business? How do these align with other organisations to allow for data sharing?
• Is there a place for a central data hub?

While the RICS data standards will seek to provide answers to many of these questions, ultimately much still depends on how data is governed by law.

Data legalities

In a series of moving parts, where technology continues to develop, the legal system is struggling to keep up. One attendee commented that while we are in the digital property age, the legal principles are pulling us back to the old ways of tracking and measuring.

In cases where laws have come into force, such as General Data Protection Regulation, the industry is still learning how to adapt. The road to legal clarification seems long, matched in length by the route to compliance.

The industry is undergoing a complex change, but it is not even using half the capacity of technology. For example, it is not as advanced as it could be in large commercial spaces – humans are still needed to check things on top of technology. Plugging these scenarios into a legal framework of compliance makes things even more frightening.

What can RICS do?

The RICS Data Standards Leaders Forum provided lots of food for thought. RICS is committed to ensuring that the highest levels of transparency, consistency and ethical practices persist so that the public interest and trust in the professions is maintained.

The suite of data standards across the real estate lifecycle that is being developed will focus on both the technical aspects of data and ethics and compliance. It will hopefully go some way to addressing some of the issues raised in the forum and ultimately, providing some clarity for the sector in this time of digital change.

Meanwhile, the TAP programme – an initiative open to any business offering data and technology in the real estate and built environment sectors – will continue to offer support to tech companies in our sector.

With challenge comes opportunity. RICS is ready to make the most of this data opportunity for our industry. The first RICS Data Standards Leaders Forum was just the start of the conversation.

Anyone wishing to know more about the RICS Data Standards, or provide comment, should contact Andrew Knight at aknight@rics.org

Any companies interested in joining the Tech Affiliate Programme should contact Shaun Leeman at sleeman@rics.org