Art and FinTech: Love at First Sight

Art and finance are closer than ever. An increasing number of collectors consider Art to be more than just an attractive commodity; its investment value has become an activity worth exploring further as confidence in the Art and sales market proliferates.




In understanding the growing value of Art and finance, we can highlight two of the more widespread trends that are likely to develop and expand in the future:

  • Wealth Management includes Art Wealth management is not new; investors are looking for advice and guidance to manage and increase their wealth through various assets. As Art becomes a more attractive investment in all stages of an investor’s life, financial advisors add this to their “menu” of services. The 2017 Deloitte Art & Finance Report indicated that 64% of wealth advisors offer Art and other collectables services. The process of building wealth is complicated, and specialized advisors offer investors the education to expand their knowledge to include Art in their portfolios.

  • More Transparency in the Art Market Historically, very few people knew the real cost of Art; private sales sold pieces only between private individuals and galleries, where sales prices were kept hidden. Only the “experts” in the field and the people within the small circle of fine arts had an idea of the money that was passing hands. Even though this practice still happens, the development of online art sales has opened up the flow of data within this relatively closed market. The result is that as more data becomes available, their cognitive power increases.

More specifically, here are two ways in which technology promises to change the art market landscape.


  • Expanding global and remote access.

When Art was sold exclusively at auction houses, it made sense for the art market activity to be more centralized in big cities like New York and London. But today, internet-based auction houses such as Paddle8 and Auctionata allow physically distant buyers and sellers to connect, decentralize and expand the market.

This has contributed to the globalization of the market and opened opportunities for regional traders to reach a wider audience.


  • Tracking Art and its origin digitally.

The most complicated aspect of buying works of Art is the difficulty of tracing the provenance of a particular piece, thus facilitating the transaction itself. Deloitte’s Luxembourg team recently debuted a prototype that could use blockchain technology to trace the provenance of a work reliably and securely, thus completely eliminating the risk of being faced with a “fraud”


“As we improve our ability to trace the history of each piece, we will eliminate an enormous amount of energy that is currently being spent wondering:


Where does this come from?”


Bocconi Students Fintech Society


Authors:

Matias Espejo

Matteo Di Lenarda

Federico Pascolini

Matteo Tardella

Carlo Mariani


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