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Here our live impressions from Exponatec Cologne today with Iris Handke, Hans Jürgen Kronauer and Angelica Maritan:

We at ARTE Generali are excited to be here at Exponatec Cologne, Germany’s most important museum and exhibition fair & meeting point in Cologne, today. At our ARTE Generali booth, together with the CEO and founder of SpeakART, Angelica Maritan, we are thrilled to present a sneak preview of what’s to come in 2022: a new innovative institutional tool, that combines our traditional product range for museums with additional digital services to make processes faster and easier to handle for our clients.

Stay tuned for 2022!

  1. ARTE Generali at Exponatec

In the past 10 years, there has been a great revolution in technologies applicable to the fine art world (e.g. related to custody, conservation and monitoring of artworks). Consequently, the world of collections has been forced to face its technological backwardness.

The two main areas where technology is currently present and applied are:

  • Front-end side: in-person and digital interaction with visitors (i.e. electronic ticketing, interaction design etc.). The pandemic has led in many cases to rethinking and restructuring these activities.
  • Back-end side: the most interesting side. Approximately 90% of an institutional collector’s activities is neither visible nor known to the public. For instance, some museums have constituted Collection Centers with joint functionalities for study and conservation purposes, leveraging on technologies such as tagging. The most interesting innovations tied in this field are mainly related to internal processes.

 

Customer journey digitization

Whether it is a private or a public collection, there are always two sides in managing the visitor’s journey: the direct visit experience on the visitor’s side, and its management on the cultural institution’s one.

Unfortunately, the digital maturity assessment conducted on Italian cultural institutions yields to this day rather disappointing results. The digital divide of Italian museums still places them behind their foreign equivalents.

According to a study conducted by ISTAT on a sample of 4800 Italian cultural institutions in 2020:

  • 83% does not provide audio/videoguides
  • 88% does not have apps for smartphones and tablets
  • 86% does not have an online ticketing service
  • 75% does not have in place analytics systems

 

The impact of technologies on the art market

The field of valuations and appraisals is one of the most impacted by technology. The potential of online sales is already known. For instance, in 2020, 25% of auctions took place online compared to 9 % in 2019. Through these selling channels, over $12.4 billions worth of art were transacted, doubling the results of the previous year. Moreover, 90% of collectors with a high disposable income claim to have visited at least one art fair or galleria via digital means in the past year.

The panorama of technological tools currently operating the art world is progressively evolving but at present, such tools are mostly deployed as facilitators of the purchasing and data gathering process, thereby lacking of a decisive role in the approach that collectors have with the art world as a whole.

Amongst emerging players in this field, there are certainly marketplaces (e.g. Artsy), data aggregators (e.g. Artnet) and digital advisors (e.g. Ocula). In the past three years, several B2B and B2C art valuation software have appeared on the market, each with different maturity stages, purposes and data sources. These software provide estimates of the value of single artworks or collections based on the aggregation and analysis of digitally acquired data (e.g. pictures of the artwork, size, catalogue entries etc.). While the system carries out a “pre-screening” phase and accelerates it, human touch and expertise remain crucial for the process’ completion.

Such software match multiple valuation indexes depending on client needs and the initial business model (e.e. art work’s insurance, lending etc.). One of this approach’s weaknesses is that the values are attributed based on results registered on databases of reference, which in the majority of instances only include auction results. The latter are only representative of a portion of the art market, which is undoubtedly important but not the only one. Currently, there are still no univocal estimates on the latter’s weight on the art market as whole. In auction transactions, the seller is known while the buyer often is not and the valuations generated by these software exclude results from informal transactions or those that occur via alternative channels, thus leading to inaccuracies in their estimates.

The role covered by these software is to integrate, support and accelerate decisional process in a transparent way. Nonetheless, perplexities remain pertaining their predictive capacities, especially in instances where the sample is significantly enlarged. When the artwork subject to appraisal is by a lesser known or emerging artist with limited free float and a heterogeneous artistic production, a predictive software’s capacity to fill in the missing data is still to be defined and improved.

 

Recommender Systems

The other important aspect to be considered amongst the applications of artificial intelligence to artwork appraisals is related to the quality and accuracy of recommender systems.  The latter constitute the main pillar of all platforms such as Amazon or Netflix. Algorithms are at the base of digital services, due to their ability of tracking user behavior, comparing it with that of other users, learning what user preferences are and based on these to generate recommendations of progressively increasing accuracy. Each recommender system functions in a unique way, thanks to its capacity of stimulating diversity, reducing user decision-making workload, increasing user satisfaction and supporting users to define their taste.

In the art world, recommender systems are also being used to support collectors or aspiring ones in their purchase decisions. Currently, only startups have worked towards the development of recommender systems in the artistic sector. However, these often lack of the necessary transaction and client data which are fundamental to progressively improve the recommender system’s accuracy and consequent effectiveness. Recommender systems’ bottleneck is that their predictive capacity is very effective when working on millions of users. When working on limited client and transaction datasets instead, the system’s predictive capacity requires more time to be refined.

Due to this reason, several startups to this day claim to be able of providing an efficient prediction service but they frequently lack of a sufficiently large statistical base for it to be truly effective since it takes time for machine learning to successfully work.

In the future, these recommender systems may conquer a market portion by focusing on a target audience with limited time to research art or who invests in art guided by speculative or other types of purposes. Lastly, according to a study conducted on Italian collectors by Banca Intesa, 93% of collectors claimed to be guided in the purchase of art by the ludic, intellectual or research pleasure. The true driver in their case is the pleasure of discovering something new. The risk for such a pleasure to be reduced or mitigated by the aforementioned recommender systems, inevitably leads one to be skeptical about the possibility for a mass dissemination of these software, especially in the B2C sphere.

 

Guido Guerzoni is a lecturer of the Museum Management course at Bocconi University in Milan and professor at SDA Bocconi School of Management. He is part of the MIC’s Superior Council and technical Art Advisor of Banca d’Italia’s Museum and of Gallerie d’Intesa San Paolo. He is one of the most ­­­expert economists of culture.

  1. Art Expertise

As official partner, we at ARTE Generali are delighted to be present at The Art Market Day at the Centre Pompidou today, one of Europe's key art market conferences you cannot miss. This year's edition brings all professionals of the art sector together to discuss current major trends and to understand how to anticipate the transformations of the art market. 

Our ARTE Generali CEO Jean Gazançon will deliver a key-note speech for the opening of the event.

Stay tuned for updates from the event here!

Also check out our interview with Jean-Baptiste Costa de Beauregard, who originally launched The Art Market Day in 2018.

  1. Art Market Day

    Jean-Baptiste Costa de Beauregard, Art Market Day

As an official partner, we from ARTE Generali are so delighted to be here at Fine Arts Paris right now! Join us until 11 November to experience this extraordinary art fair and visit us at Carrousel du Louvre in the heart of the city of Paris. 

Here are live impressions directly from the exhibition - with interviews featuring our Head of France Philippe Bouchet, Louis De Bayser, president of Fine Arts Paris, Florence Chibret-Plaussu (Galerie de la Présidence), Bertrand Gautier (Talabardon) and Patrick Maffei (Galerie Ditesheim & Mafei).

  1. Fine Arts Paris

    Philippe Bouchet

For what concerns the intersection between technology and art, the most fascinating topics are: digital art, applications of artificial intelligence to art, online sales, which have experienced 500% growth as a result of the Covid-19 pandemic, artists’ and collectors’ use of social media, technologies such as augmented, virtual or "mixed" reality for artistic fruition and lastly the fingerprinting, blockchain and tokenization technologies.

I would like to focus especially on the latter. Nowadays we often talk about NFTs and digital art. However, the topic of tokenization is not only tied to these two applications, but it is also associated with the possibility of creating security tokens for art pieces. It is estimated that globally over $1,74 trillion are invested in art and collectibles. Thanks to technology and especially to tokenization, it might be possible to integrate this sum in wealth management practices. In the past 10 years, we have been able to identify the difficulties of including an art related offering in financial and wealth management practices. This is mainly due to issues related to art work valuation, liquidity, lack of transparency and of an adequate regulatory system. At present, even though multiple solutions are being developed to overcome these challenges, a widespread and systematic approach to identify art pieces with certainty is yet to be implemented. Over time, technology will enable for a more holistic approach to wealth management, comprehensive of art related services.

Should it be possible to tokenize the aforementioned $1,74 trillion as security assets, and therefore treat them as financial products, the Wealth Management sector could better manage collectibles, also from a collection management, valuation and protection standpoint. One of the possible future applications could be “art secured lending”, which consists in granting loans to purchase art pieces on a parametric base, and thus insured by the blockchain system. Protection, monetization and transferring value to the next generations are fundamental themes.

Lastly, future applications of the tokenization technology in the art world could support cultural institutions with liquidity issues. For instance, some cultural institutions in the USA who were experiencing economic hardship have sold art pieces of their collections to support themselves financially. Although it is a rather controversial and provocative topic, instead of selling art pieces from their collections, why do cultural institutions not create security tokens for an art piece instead? This would allow selling partial ownership of the piece to other private and institutional clients, but the tangible art piece would remain exhibited in the cultural institution’s premises. At present, such a solution would be impossible to implement in Italy and in Europe, but one day it could become a way of “monetizing” art pieces.

 

Adriano Picinati di Torcello is Global Coordinator for Deloitte Art & Finance and leads all activities related to the Deloitte Art & Finance division in Luxembourg. Since 2008, Deloitte’s Art & Finance operations have started growing internationally. Adriano Picinati di Torcello is co-author of the biannual publication Deloitte and Art Tactic “Art & Finance Report”, which describes the main trends and topics related to the art world.

 

Deloitte Tax & Consulting, société à responsabilité limitée (“Deloitte”) grants Generali Italia S.p.A. (“Generali”) a perpetual, revocable, non-exclusive, non-transferable, royalty free and worldwide license to use, print and publish, in the form approved by Deloitte, the white paper entitled “L’Ecosistema Digitale dell’Arte” written by Generali based on the participation of Deloitte’s employee, Adriano Picinati di Torcello, to Generali’s conference on May 12, 2021 regarding the “L’evoluzione tecnologica del mercato dell’arte” (the “White Paper”). Deloitte authorises Generali to use Deloitte’s name in the White Paper only to the extent required in the framework of its publication. The licence hereby granted to Generali being limited, revocable, non-exclusive, non-transferable, royalty free and worldwide. Any and all publications and/or materials relating to the White Paper and/or any reference to Deloitte to be made by Generali has to be submitted in draft version to Deloitte for approval prior to publication and/or distribution. Deloitte reserves the right to request Generali to modify content of such publications and materials.” “Further information about Deloitte processing of personal data, rights of data subjects (e.g. access to, modification or deletion of data, or withdrawal of consent) and how such rights can be exercised, can be found in Deloitte Data Privacy Statement at https://www2.deloitte.com/lu/en/legal/privacy.html.

How does the ArtTech phenomenon impact the art market and what can art insurers do to alleviate the fears surrounding the impact of technology?

Jean Gazançon, CEO of ARTE Generali: “As art insurers, we can do our part to dissipate concerns and raise hope around technological progress - of course, always fulfilling our traditional duties of protecting and indemnifying, which remain essential. We can assist the stakeholders along the value chain by offering better and more personalised services, and helping art lovers to enjoy the experience of collecting to the fullest.”

For the Deloitte Private’s 7th Art & Finance Report presented this week, Generali Deutschland AG CEO Giovanni Liverani (p. 130) and ARTE Generali CEO Jean Gazançon (p. 266) contributed as expert voices to share their views on the impact of technology on the art market and ARTE Generali’s specific role as a digital pioneer in the field of art insurance. 

Read their expert insights in the newly launched Deloitte report Deloitte Private’s 7th Art & Finance Report here: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial-services/artandfinance/lu-art-finance-report-2021.pdf

 

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  1. Deloitte Private’s 7th Art & Finance Report

    Deloitte Private’s 7th Art & Finance Report