Informed.IQ, a developer of AI-based software for income and employment verifications, announced today it recently commissioned an industry-wide survey of property managers and landlords to take the pulse on the state of applicant fraud, the ongoing frustrations of tenant verifications, and the use of AI in the applicant verification process. Click here to see the complete data report.
The residential rental market is a critical component of the broader real estate industry. With an increasing number of people opting for rental properties over home ownership due to various economic and lifestyle factors, the demand for rental housing continues to grow. However, this growth has brought with it a significant challenge: the rise of fraud in tenant applications.
Informed.IQ’s online survey was presented to more than 3,000 property management professionals last month. In terms of how managers are conducting their applicant tenant verifications, nearly half (46%) said they still conduct verifications manually, 28% with tenant screening software, and 26% by outsourcing screening services to third-party services.
Continued challenges in applicant verifications
Furthermore, managers have many challenges they still deal with for verifications. The majority (27%) say the process of verifications is extremely time consuming. Eighteen percent say they experience a lack of reliable data during the verifications process; another 17% say inconsistent results; and 12% say legal compliance issues. For managers dealing with fraudulent tenant applications, nearly one in four managers say they deal with fraud in a quarter of all applications.
Manual screening still prevalent
Manual screening is a labor-intensive process that requires significant time and effort from property managers. Fifty-one percent of managers say they still manually verify applicants and their documentation. Of these people, 31% continue with their manual process because they feel there’s a lack of suitable technology available. Also 29% still have faith and trust in their legacy manual process.
Professionals’ growing interest in AI technologies
The use of artificial intelligence (AI) has brought new opportunities and the possibilities of even more power for managers during the application process. However, 60% of managers say they are admittedly unsure about the familiarity of how AI may help them in their efforts to thwart fraud. Furthermore, more than half of respondents (53%) say while they aren’t currently leveraging AI, they would be interested in learning more about it, and nearly a quarter (23%) say they are currently considering its use.
Of those considering, 22% feel it can help with improved accuracy in spotting fraud, and 60% say they believe it offers faster processing capabilities, enhanced compliance with regulations, and better risk management. There are concerns, however. Twenty-two percent worry about the integration with existing systems, and 21% wonder if AI will have issues with bias and fairness in the data algorithms.
“Despite advancements in technology, property management professionals still face significant challenges with applicant fraud and verifying applicant information,” said Mac Rechan, Head of Partnerships. “It’s alarming that a substantial number of managers continue to rely on manual application verifications, a process that is not only time-consuming but also prone to errors and fraud. The promise that AI driven verification technology holds is significant. By automating and enhancing the verification process, AI can detect fraudulent activities more efficiently, ensuring that only qualified applicants are approved. This not only protects property owners and managers but also contributes to a safer, more reliable rental market. Embracing AI verification technology is no longer an option but a necessity for the multifamily industry to combat fraud and streamline operations.”
Click here to see the complete data report.
About Informed.IQ
Informed uses AI/ML to instantly verify income, assets, residence, insurance, auto stipulations, credit stipulations and more, enabling real-time, reliable credit decisions without bias. Informed’s models are trained to process hundreds of document types and consumer-permissioned data sources, automating stipulation clearance for lenders. In 2023, Informed processed over 6 million consumer credit applications. The solution automates verifications with 99% accuracy in seconds with no humans-in-the-loop.
Informed’s Knowledge Graph and Data Consortium comprising more than 66 million records and 1.5 billion lending data points powers a Configurable, Verticalized AI Platform enabling scaling of portfolios of documents and data.
To learn more, visit informediq.com or follow Informed on LinkedIn.
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