Expert discussion: "The digital future has already arrived."
Since October 1, 2018, Gerald Kremer has been responsible for digital transformation in the Global Real Estate division of Credit Suisse Asset Management as Chief Digital Officer. In an interview with Christoph Schumacher, Head of Credit Suisse Global Real Estate, he discusses the exciting opportunities being created by digitalization in the real estate sector in general and Global Real Estate in particular.
Christoph Schumacher: Our entire lives are becoming increasingly digital. This has given rise to a whole host of new opportunities, including in Global Real Estate. A professional digitalization strategy is essential if we are to take full advantage of the opportunities and do so profitably. We have therefore strengthened our team by hiring Gerald Kremer at the beginning of October. In his role as Chief Digital Officer he is responsible for developing Global Real Estate's digital corporate strategy. A warm welcome to Credit Suisse Asset Management, Gerald.
Gerald Kremer: Thank you Christoph. I am very much looking forward to this exciting new challenge. As you mentioned, digitalization offers a host of opportunities for the real estate sector. It not only enables us to reduce costs and risks, but also allows us to redesign processes more efficiently and open up whole new business lines.
Christoph Schumacher: That's exactly where we want to start. In addition to developing our digital strategy you will drive forward existing digitalization projects and launch new ones. As head of the Innovation Hub you are also responsible for managing innovation and for our strategic cooperation with proptech companies.
Gerald Kremer: "Proptech" is definitely a buzzword. Formed by combining "property" and "technology", it symbolizes the digital developments underway in the real estate sector.
Christoph Schumacher: The number of proptechs is growing rapidly. They are often start-ups, but some bigger companies are active in this space too. They all offer digital products or services aimed at various parts of the real estate value chain.
Gerald Kremer: Absolutely right. This can include software and hardware solutions to optimize certain processes or the introduction of smart information and communications systems, for example. By forming partnerships with them we hope to spur innovations which offer added value for everyone concerned – this means both for Global Real Estate and investors and tenants.
Christoph Schumacher: Generating new ideas is what it is all about.
Gerald Kremer: Yes, I agree. Studies have shown that organizations that are highly innovative and have efficient, data-driven and flexible processes enjoy much greater success on the market than their competitors.
Christoph Schumacher: The new ideas don't necessarily need to be generated by outside companies. Within Global Real Estate itself there are some great ideas on the subject of digitalization.
Gerald Kremer: Definitely. Global Real Estate therefore has an excellent opportunity to become a pioneer in this within Credit Suisse Asset Management. Compared with other sectors, real estate is something of a laggard when it comes to digitalization at the moment, but has huge potential to catch up by implementing initiatives that are already on the drawing board.
Christoph Schumacher: That's good news and its importance cannot be overstated. Given that digital technologies are increasingly lowering barriers to entry in our industry, it is critical for us to get to grips with this issue and ensure Credit Suisse Global Real Estate is well positioned for the future.
Gerald Kremer: To achieve this we have to act now and start by taking stock of where we currently stand. The results of this analysis will then form the basis for developing our digital strategy and the specific project building blocks.
Christoph Schumacher: That makes sense. You need to have an overarching strategy before you can turn your attention to launching specific projects. This strategy must consist of a long-term plan with clearly coordinated building blocks.
Gerald Kremer: What is extremely important to me is that the digitalization strategy not be viewed purely as an IT issue but rather from a cross-divisional perspective. We therefore need to break down silos – both at the process level and by collaborating across disciplines.
Christoph Schumacher: Support from management is also critical for success.
Gerald Kremer: Absolutely. The digitalization strategy has to be actively supported and backed up with appropriate resources and implementation options. Only then will it be able to generate the added value we have mentioned for the various stakeholders on a sustainable basis.
Christoph Schumacher: That's exactly why we made the deliberate decision to add the skillset we need to our organization by appointing you as Chief Digital Officer in charge of developing and implementing the digitalization strategy. Expanding on the digitalization strategy – what initiatives could form part of it?
Gerald Kremer: I could give you a long list of possible examples. Some of them are very much still futuristic, but there are also initiatives that show that the digital future has already arrived in the real estate sector.
Christoph Schumacher: Can you give us two examples as an illustration?
Gerald Kremer: Sure. Let's start with the question of artificial intelligence. This is already being used successfully here and there, for example in data and contract management. However, the technology obviously has huge potential and I'm pretty sure it will be used in the analysis of entire portfolios before long. AI can help to structure processes more efficiently and organize large volumes of data and thus facilitate data-based, risk-minimized decisions.
The internet of things is another good example. Using internet-linked systems and sensors, it is now possible to trigger automatic messaging and related processes in the event of damage to monitoring and evaluation systems – in real time and without the property having to be inspected in person. Of course, the property has to be equipped with the appropriate sensors to enable this. So it is important to integrate these issues in the decision-making process from the outset when developing new real estate projects.
Christoph Schumacher: Both fascinating ideas that show how digital innovation is making its presence felt in asset management. I firmly believe that the issue of digitalization will continue to grow in importance in our industry. And I am confident that you and your team will actively add value to Global Real Estate's excellent product portfolio. I wish you every success in it!
Gerald Kremer: Thank you very much!