The Deloitte Art & Finance Report Uncovers New ArtTech Trends for 2019
Now in its 6th edition, the Deloitte Art & Finance report has become an industry standard, a publication focuses on external factors such as increasing political and economic uncertainty, technological trends in the art industry, and how various factors impact the wealth management of art.
The Deloitte Art & Finance Report is based on 4 surveys with 54 private banks, 25 family offices, 105 art collectors and 138 art professionals from all over the world.
Since Deloitte’s last report in 2017, transparency and technological factors such as digitization have become more visible within the art market. The 2019 report offers a conclusion about technology’s impact on art wealth management that signals how wealth managers are grappling with key issues involving technology.
In particular, it finds that there is a need for technology that can tackle the challenge of information asymmetry in the art market. Blockchain, for example, is given as an example to show how technology is providing enhanced tools for transparency, accountability and provenance. Digitization and virtualization are impacting the art market. New business models and sales channels are providing technology startups with professionalism and increased consolidation of online art trends are discussed in the report, which concludes with the following findings:
ArtTech startups have raised US $600 million over the last eight years
50% of ArtTech investment have done into transaction-related businesses, 25% into discovery and social, 15% into logistics and collection management, and 10% into data-related ArtTech startups.
NextGen ArtTech startups are focusing more on peripheral business segments
Logistics, insurance, contracts, legal, storage, data, standardization, education and new artist discovery among the leading ones.
Online sales growth slowing down
According to the Hiscox Online Art Trade report 2019, the online art market grew by 9.8 percent overall in 2018 to US$4.46 billion. This was a slower pace of growth than the 12% experienced in 2017.
Industry consolidation likely to continue
71% of those surveyed by Hiscox said they expected more consolidation among online art platforms in the coming 12 months.
Technology will drive the art market
Digital investment has disrupted the traditional art marketplace, accustomed to collectors and artists online through platforms like Artsy and Instagram, which brings transparency and access to pricing data too.
Provenance and traceability
Risk managers surveys said that a lack of infrastructure (e.g., a title register) enabling stakeholders to track and uniquely identify the ownership and province of works of art is seen as a key problem by 72% of wealth managers (up from 69% in 2017)
84% of wealth managers said that forgery and problems with attribution remain the greatest area of risk and posed a threat to the reputation of the art market (up from 83% in 2017)
Improving valuation online
Though valuation and online art market sales growth has slowed since 2018, valuation serves have become increasingly more important in the art market ecosystem. Meanwhile, Sotheby’s moved deeper into online arts business, adding Yiyet.com — an online market place for vintage and antique furniture and decorative objects.
Improving data and trust
Increasing quality data analytics and getting best-quality data for wealth mangers is lacking, according to the Deloitte report. 72% of wealth managers surveyed said that a lack of infrastructure was seen as a key problem in stabling ownership and provenance
Government vs. Self-Regulation
In 2017, 60% of wealth managers said they were in favor of self-regulation, while 2019 wealth managers flipped with 54% of those surveyed favour of more government regulation.
The Deloitte 2019 Art & Finance Report concludes that technology, social investing and regulations are key trends moving forward set to shape the art and finance market in 219 and beyond.
Originally published at .ART.