What the ICE-Black Knight Merger Means – Part 5

“When a paradigm shifts, everyone goes back to zero”

Joel Barker – The Business of Paradigms

The basis of competition is shifting as ICE, CoStar, Zillow, and perhaps GSEs (released from conservatorship), compete for consumer attention, top producer loyalty and data supremacy.

The “on platform” first movers will grow profit margins, gain market share and build brand equity by controlling their digital rights, adopting interoperability standards and creating greater value from local networks.

This merger means modernization that advances real estate toward an adaptive, sustainable and connected future.

ICE has previewed a Consumer Engagement Suite which could deliver a list-to-loan-to-servicing experience, combining listing, lending, liquidity and loan servicing.

It promises a systemwide upgrade where everyone wins except the unstable status quo. Digitization will enable industry efficiency, new choices for consumers and communities, reliable liquidity for capital markets and risk aware pricing of guarantees.

ICE’s network and trading capabilities could transform primary and secondary money markets, directing global capital to better meet the needs of local communities and unlocking innovations that benefit consumers and other investors.

Capital markets will become smarter as spot and futures data inform risk pricing for a range of financial assets.

REALTORS should expect the cost structure and perhaps the revenue model of MLSs to flip, receiving compensation for data captured beyond the listing.

ICE’s patient capital commitment to the sector may also represent the last best chance for REALTORS to capture the value of their digital contribution to transactions downstream. REALTORS have a structural advantage as the listing event is the signal to downstream transactions…but will they ever share in the value of their data and profit beyond the first point of sale?

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