Auction Insights with Artisio

Environmental sustainability is now a shared responsibility among individuals and organizations. With the threat of climate change being more serious than ever, companies are now expected to be more involved in protecting natural resources and to apply environmentally sustainable business practices.

A company can only gain a competitive edge if it can assure that every single aspect of its business operations does not negatively impact the planet.

Customers are now conscious about patronizing products and services from brands who are transparent in their efforts to reduce waste and consume less energy. Investors likewise make investment choices based on an organization’s plan of action on sustainability.

The Auction Industry and Art Market’s Role in Environmental Sustainability

The auction industry and the art market are not exempt and can also have a heavy impact on the environment. For instance shipping and logistics, which includes transportation of consignments and delivery of auction items, contribute to carbon emissions. There’s also business travel, building maintenance, packaging of purchased pieces, and other business operations that produce greenhouse gases and leave a carbon footprint.

The good news is that the auction and art industry recognize its role in building a sustainable future by fostering the circular economy. It has a rather strong incentive for taking this environmental responsibility seriously. Art and other auction pieces, after all, are a form of investment, and people purchase them because of investment decisions that are based on their trust in the auction company. Such decisions are hardly driven by need. So, a company’s sense of accountability and responsibility in addressing issues relevant to the times, like climate change and global warming, will really influence these decisions.

What auction houses are doing for environmental sustainability so far

Now, after over a year of holding auctions through online or digital platforms due to the Covid-19 pandemic and the rules of social distancing, more and more auction houses and art galleries are realizing how doable sustainability is. Of course, the sale and purchase of antique and vintage items is a form of recycling and, compared to purchasing new pieces, leaves less carbon footprint. But with online events, auction houses and galleries have significantly reduced the production of printed materials like catalogues, thus saving paper and energy.

Christie’s, for example, had committed in 2019 to reduce their print production by half by the end of 2020 from printing more than 700,000 materials every year.

They saw the initiative as not just possible but essential. However, Christie’s surpassed their goal, what with the pandemic and the enforced social distancing rules and the auction house switching to an online bidding format. It successfully reduced the production of printed materials by 75 percent

It is accountability, collaboration, and coordinated effort among players in the industry that will help push this cause forward and generate a lasting impact for the planet. One company’s actions will not be as significant as an entire industry’s collective effort.

Artisio’s Contribution to Environmental Sustainability

Artisio is committed to doing its part in protecting the environment.

For instance Artisio is powering online auction house platforms for both mobile and desktop and delivers powerful front-to-back functionality for these platforms. We offer an auction management system that takes care of everything for auction houses and galleries – from inventory management, to a comprehensive and versatile customer relationship management (CRM), to seamless online auction integration, to payment solutions.

Through this cloud-based AMS, which our clients in the industry can access from anywhere and at any time, we can help them create a mobile working environment for their employees. Being able to work from home or anywhere outside the office allows employees to save on energy costs and to reduce their travel-related carbon footprint.

The ability to move from a physical space to an online space will also help auction houses and art galleries create a paperless environment. The Artisio Auction Console removes the need for users to print auctioneers book and catalogues. Instead, a digital auctioneer’s book will contain information about all the lots under the sale, the commission bids, and the telephone bids. Auctioneers will be able to input the item Hammer Price and winning Paddle Number during the online live auction process. Everything is accessible with just a click. In due time, printing auctioneer’s books for every event would look like a wasteful luxury.

Artisio also works with third-party providers, which allows users to easily make digital signatures and cut down paper printing for records and documentation.

We can also generate auction PDF catalogues on the fly, then allow users to send it to clients.

We at Artisio know that our efforts and responses toward a healthier environment do not end there. We are committed to doing more and we will continue to look for more ways to help auction companies reach their sustainability goals through our digital solutions and cloud-based offerings. Let us take one step at a time.

The Fifth Anti-Money Laundering Directive or 5AMLD came into effect on January 2020 and reinforces the European Union’s Anti-Money Laundering/Combating the Financing of Terrorism or AML/CFT regime by enhancing transparency in financial transactions. The AML/CFT already implements money laundering regulations, which are robust and comprehensive requirements aimed at preventing businesses from being used by organized crime groups to launder money or to finance terrorist activities within EU member states.

Now, the 5AMLD extends the scope of the controls enforced by AML/CFT to digital currencies and digital currency providers. Its goal is to eliminate anonymous transactions involving cryptocurrencies to prevent fraud. And 5AMLD aims to achieve this by requiring that centralized data registries be put in place so that authorities will be able to quickly identify cryptocurrency account holders and controllers.

But how exactly do companies, especially galleries, art dealers, and auction businesses, stay compliant?

First Things First: How Do Money Laundering Regulations Affect AMPs?

Art Market Participants (AMPs), which include galleries, art dealers, and auction businesses, are vulnerable to the dangers of financial exploitation. Transactions with AMPs may be used for criminal or terrorist financing or as a means of laundering money to fund serious organised crime like drug importation and human trafficking. Enabling money laundering to take place as a mere result of a lack of due diligence and controls in the part of an AMP can result in sanctions, reputational damage, or even criminal conviction.

As such, money laundering regulations (MLRs), which are strict and specific, are put in place to protect AMPs from becoming unwitting victims to organized criminal activities.

HMRC Pointers

Here are five important guidelines from the HMRC regarding this directive, especially with the June 10, 2021 deadline for Art Market Participants (AMPs) to register for money laundering supervision nearing.

1. Risk Assessment

Compliance with money laundering regulations is built on the foundation of risk assessment. You are legally obliged to assess the risks of your business based on your business model and to accommodate business changes and developments as they come. These changes and developments will affect money laundering and terrorist financing risks, too.

2. Policies, Controls, and Procedures

After compiling a comprehensive and robust risk assessment, you need to put in place or implement an equally comprehensive plan on how to manage these risks. A risk-based approach includes appropriate policies, controls and procedures (PCPs) designed to effectively mitigate the risks that you have earlier identified. These PCPs also need to be reviewed and updated regularly.

These PCPs naturally need to be adapted to reflect whatever changes to your picture of business risk. They should detail how these risks will be addressed and how it will keep doing so as your business evolves and the risks change along with it.

HMRC Regulations 28 and 29 actually outline how a risk-based approach can be achieved, but it has to be applied according to the individual business’ model and requirements.

3. Customer Due Diligence

Money laundering regulations also specify when to apply customer due diligence. Regulation 27, more particularly, details both the general and specific customer due diligence requirements for AMPs. And once you have decided on when to apply this due diligence, Regulation 28 details how you should go about it. It is imperative for you to know the identity of your clients, so it follows that one of the cornerstones of MLRs is customer due diligence.

HMRC requires that know-your-client or KYC checks should be undertaken on a client’s transacting with your business above the threshold of 10,000 euros, whether it is a single transaction or multiple linked transactions.

Most of the post-inspection penalties imposed by the HMRC on AMPs contain a sanction that is related to their failure to properly comply with requirements for customer due diligence.

4. Timing of Verification and Record Keeping

The MLRs have outlined rather specific requirements regarding when to perform customer due diligence verifications. You need to create audit trails to demonstrate that you have complied with the regulations. As a business, you also need to understand the record-keeping requirements in order to easily comply with them.

AMPs must securely record and store customer data relating to “Know Your Customer” requirements, including IDs, date of birth, and full address. Be sure, however, that you comply with GDPR when collecting personal data. Auction houses are required to appoint a Data Protection Officer in accordance with UK GDPR.

You also need to keep customer data in your record for five or 10 years after your business relationship with a customer has ended.

5. Enhanced Due Diligence

It is essential for AMPs to know when to apply enhanced due diligence (EDD). You need to make a connection between your risk assessment, and your policies, controls and procedures, as well as to the resulting EDD requirements.

While most people expect to apply EDD when doing a highly unusual transaction or transacting in more obvious circumstances, like when it involves a politically exposed person, the MLRs are specific on the full range of requirements for EDD. For instance, how do you know if you are dealing with a politically exposed individual, with their family member, or with a known associate? Are you expecting to maintain a business relationship with a customer who is established in a high-risk third country?

High-risk countries are those countries that present no or deficient anti-money laundering and terrorism regimes. The 5AMLD wants to make sure that businesses in EU states dealing with these high-risk third countries apply systematic enhanced controls. In fact, the 5AMLD encourages sectors in member states to limit their relationship with these high-risk countries.

Artisio: Supporting Compliance and Delivering 5AMLD Solutions

Making these anti-money laundering requirements an intrinsic part of your business operations is the key to compliance. For AMPs, the overall legal responsibility for compliance rests in the hands of the business and cannot be outsourced to a third-party.

Artisio’s impressive auction management software (AMS) is designed to support AMPs by offering a module which facilitates AML/KYC checks to be carried out on all clients via any of the major third-party compliance providers in the marketplace. This unique module will integrate via an API link and ensure a seamless and secure 2-way process of capturing, recording and safely storing client’s data in accordance with GDPR regulations.

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If you are in the auction or trade industry and are looking to upgrade your current auction management system (AMS) to use in your business, you need to consider a few things before you make your choice. It would not be wise to invest in one and overhaul your current management system only to find out later that there is another management platform that’s more suitable to your needs. You would not want to contend with being short-changed by an AMS when you could have specified the perfect option for you from the start.

First Things First: What You Need to Know About Auction Management System

Whilst live, on-site auctions, are great as they allow buyers to see the auctioned items in person and inspect these items closely, many auctioneers have been forced transition to online-only auctions in the past year due to the COVID-19 pandemic and the restrictions on holding large gatherings. With this transition comes the need for auction companies to implement their own web-based auction platforms.

In simple terms, an auction management system is an online application enabling users to present lots for auction whilst delivering a seamless user journey for bidders and buyers.

Having an integrated AMS presents plenty of advantages that were otherwise not available for on-site bidding events. More and more companies are seeing these benefits and are becoming more discerning about the kind of AMS they require in order to stay ahead in the game.

What Great Auction Management Systems Should Be Like

The best auction management systems are comprehensive cloud-based platforms that allow auction companies to control their online auction portals or websites without the need to worry about their software or their infrastructure. Cloud-based systems are more flexible and more accommodating to growing businesses.

Additionally, the most comprehensive of these platforms are the ones founded or designed by auctioneers and industry experts who know all aspects of the auction business and have incorporated all of these aspects into a single system. These auction management applications boast a host of powerful and easy-to-use features. These tools would make them a one-stop shop for auctioneers, art galleries, real estate agents, estate sellers, liquidators, equipment and machinery dealers, and other businesses that make use of the auction method.

Auctioneers increasingly need an AMS that offers capabilities like targeted marketing, product cataloguing and stock control, consignment management, logistics and inventory management, live auction events, invoice generation, real-time bid tracking, and payment processing, among others.

Needless to say, good management system platforms can accommodate and support an assortment of technologies. These are software applications that you would need to perform a wide variety of tasks and functions and to interact with applications used by your bidders at the front-end. As such, look for an AMS that utilizes API or an application programming interface that would define interactions between these multiple software applications.

What’s more, good AMS also have the buyers and bidders in mind. Not only do they accommodate the needs and requirements of auction companies, they should also offer consumers convenience. Easy navigation, user-friendly cataloguing of items, and even accurate visual presentation of the products should be integrated. These platforms should also make online bidding events a seamless and enjoyable process for consumers in order to encourage them to come back in the future.

Other Important Considerations for an Auction Management System

When you are shopping around for the best AMS for your business, it is also imperative to investigate data security. Make sure you go with a provider that promises safe and secure data management and bidder registration process and stores these data in an ISO-certified data center. You should also look into GDPR compliance.

Aside from data security, your AMS should be able to protect you as a business. Find out if your AMS of choice utilizes smart analytics and provides you reporting on a buyer’s bidding and spend history. It should also allow for pre-auction checks on a bidder’s credit and debit card automated deposit, pre-authorization and bidding limits, and post-sale payment request emails to successful bidders.

Your AMS should also give you and your customers options as far as payment partners are concerned. The payment app that comes with your AMS should be able to support, accept, and process payments done through various banks and third-party payment solutions.

It is also essential to know how your AMS provider would be able to support you throughout the different phases of your business growth and throughout any technological setbacks. Know if your provider has a team large enough, and agile enough, to react to any eventuality, quickly and effectively, as well as handle all AMS-related problems. Is the team also equipped to implement changes in your system, or in your processes, as your business grows? In other words, scalability is key, your AMS should not be something you outgrow as you evolve, It should also grow alongside its clients.

Why Artisio AMS is the Right Fit for You

With, Artisio AMS is one of the best and most agile auction management solutions available on the market today. Artisio has years of experience working in the auction sector and therefore understands the need for companies to adapt existing technologies to meet their current and future business goals. Artisio developed its intelligent and high-performance cloud based AMS with a clear understanding of the auction sector’s specific requirements.

Artisio AMS is a powerful tool for tracking, monitoring, and analysing everything relevant to your business, in real-time. It provides enterprise-level support for companies working in multiple locations around the globe and can even support transactions in multiple currencies.

It is a complete front to back AMS and boasts a fully integrated stock management solution, a safe and secure bidder registration and data management, and a powerful auction creation capability with fully customizable sales. You can facilitate live and timed auction events or sale days regardless of the type of sale, wherever you are in the world, and in whatever language and currency you are using. Everything is customizable.

What’s more, all user data are stored in an ISO27001- and ISO27018-certified data center.

Check Artisio AMS’ full-service offerings here.

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With the COVID-19 pandemic hitting the world, many businesses were forced to adopt digital technology to carry on with their operations and prevent closure. It has forced companies and organizations across different industries to take a hard look at their digital infrastructure and start doing things differently as they step into the “new normal.” However, even before the pandemic happened, some industries have already acknowledged digitalization as the future of marketing, sales, logistics, insurance, and all the other aspects of business operations.

The auction industry is one of these industries. Many auction houses had already embraced an era of digital transformation even before 2020. The auction industry knows that technology is changing the way people consume art in the modern times and that it is important for them to come up with a strategy to apply auction house software to common art management issues.

Using Digital Media as a Tool for Selling Pieces

Large auction houses, like Sotheby’s and Christie’s for instance, have long supported the use of digital media as a tool for selling rare art and unique pieces to the international market. After all, not all who may be interested in bidding and acquiring a particular piece can be physically present at or send an in-person representative to an in-room or live auction, especially if they’re from overseas. As such, conducting auctions online means these companies broaden their clientele and their reach so as to include buyers from other parts of the globe.

Having online capabilities will also help art galleries and auction houses improve their buyers’ overall experience. It’s true, nothing beats being able to see the pieces up close with your naked eyes, but this is where superior images come in. We now have high-Definition cameras that can capture clear, crisp, and life-like photos that allow potential buyers to view the pieces and make informed buying decisions. Besides, younger buyers are comfortable and, in many cases, prefer making purchases online.

Digitalization means easier access to information

Moreover, digitalization creates transparency for collectors, as well as provides them easier access to information. Bidders or collectors are increasingly able to access more information about certain pieces easier than before. Unlike in-room auctions where you only have the information provided by the auctioneer, online auctions make it easy for you to make valuable research about a particular artwork, artist, craftsman, and unique piece before you can make a bid and purchase an item.

Of course, for the auctioneer’s side, there’s also unprecedented information on every registered bidder and higher visibility for setting reserves. This visibility has resulted to high sell through rates.

Buyers and sellers are embracing digital transformation

When the UK lockdown happened due to the pandemic, online auctions had to replace in-room auctions at the drop of a hat. Bringing auctions online was already something that the industry sees happening in a few years, with some auction houses already gearing up for gradual changes. But because of the Covid-19 crisis, what was supposed to take years needed to be done overnight. Most auction houses and art galleries had to implement a digital strategy within weeks rather than years.

According to Essential Information Group, auction volumes did drop some 20 percent year on year, but this is already an achievement considering how the wider market is doing. The auctions market has managed to maintain their access to property by quickly moving online. After all, there was still demand and there was still money in the market.

The numbers show that buyers and sellers have embraced the change. Conducting auctions as a live-streamed event is the closest that companies can get to recreating in-room auctions.

In fact, according to Max Mason, the head of 574, Lambert Smith Hampton’s online auctions platform, online events are actually far more personal than one could expect. This is because he is able to see every single registered bidder from his desk at home, and if he feels like one of the bidders needs to be amped up, he could call them and personally address concerns and answer inquiries.

What Else is There for Auction Houses?

With digital transformation well under way, and with major auction houses already having kept up with the times, what else is there to look forward to other than online auctions or live-streamed events?

For one, auction houses can follow Sotheby’s footsteps. It has launched a mobile app, which offers the same art pieces as the ones offered in its online platform, mySotheby’s. This mobile app has a mechanism that allows bidders to leave absentee offers, to view results of the auction in real-time, and look for upcoming lots.

Other things that auction houses can implement include augmented reality software, where potential buyers can view a painting, print or work of art in situ on their wall at home or in a corner of their favorite room. Virtual reality headsets, which would bring traditional auction experience into the homes of online bidders. They would no longer content with looking at pictures on their screens, but they could use VR headsets to walk around the display room and observe the pieces in their three-dimensional glory. In effect, potential buyers can get the emotional and competitive feel of going to the auction and bidding without having to leave their homes.

Auction houses can also bring in Artificial Intelligence. Imagine an AI auctioneer that could give out painting facts as well as survey the room for bidding probabilities?

Artisio as Cloud-Based Auction Solution for Digital Transformation

With traditional auction houses around the world facing many challenges because of the COVID-19 pandemic, they need a partner in implementing efficient, accurate, and sophisticated digital solutions that will add value to their business.

Artisio can be this partner.

Artisio is uniquely positioned to design and implement a cloud-based solution for auction houses to complement and work alongside digital transformation. It has its own auction management software and back-office auction house solution that will make it easy for auction houses to automate their processes and effectively manage their events and activities. Artisio’s goal is to support auctioneer’s front to back processes in an increasingly online and mobile environment. Understanding that customisation of functionality is key to supporting an auction business’s needs to make onboarding, management, and monitoring a pain-free and seamless experience for its partners.

By listening to auction companies and identifying the things that are missing from their existing management systems, Artisio promises to develop auction solutions that are tailor-designed to every modern auction house’s needs. Ultimately, it will help partners shape their auction house management, both for them and their customers.

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