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“With technology all information is immutable and Blockchain cannot be compromised,” reassures Erik Jens, CEO, LuxuryFintech

25 january 2021

erik_jens_xx.pngWhen Erik A Jens quit ABN AMRO as global CEO of its diamond and jewellery client division, he started his movement called LuxuryFintech, which provides services such as commercial and corporate banking solutions for the art and jewelry sector, and asset-backed finance solutions for art and jewelry sector with blockchain solutions and many more.

As Founder/CEO of LuxuryFintech, Erik Jens is involved in various projects and initiatives related to finance and provenance matters in the jewellery sector as well as the art sector. He comes armed with professional experience in banking, financing and investments; and specialized in private wealth management solutions, investments in hedge funds, private equity and real estate industry.

Here, in an interview with Rough&Polished, besides spelling out the nuances of fintech business, Erik provides some very crucial updates on some of the most recent developments in the luxury fintech sector.

Some excerpts:

Since we featured you last year in our publication Rough&Polished commenting on the impact of technology on the jewellery sector, what has changed since? Why do you focus on both the jewellery and the art sector?

Well, that is quite obvious. Both sectors are challenged with matters like provenance and authenticity. Is the artwork real or forgery? What is a fair value, who decides on such a ‘value’. What is the provenance of a piece of art? How to find a suitable trading platform? For what amount I should insure the piece? Are there any other pieces of art from the same or similar artist and so on…

The same goes for jewellery as well. How do you know the diamond or the colored gemstone is conflict-free? What do we know about the gold or the platinum? How to sell and buy? Which value and why it is reasonable? The end jewellery is also a piece of art, after all.

So, are you convinced that technology is the only way to find solutions for all these issues? What are the most recent developments in this field? Please throw some light on this for the benefit of the end consumers/ investors.

I believe that modern technology like blockchain and certainly other technologies also can provide solutions in all these challenges. One can see and follow the provenance of a piece of art for instance and its pedigree. Same for the source of gold or a diamond, one can see exactly where these products are sourced. That is, with technology all the information is immutable. In other words, technology like Blockchain cannot be compromised.

Another new initiative is for instance YourDiamonds, which will provide several apps exclusively for the jewellery trade for pricing, trading, insurance, etc, the full spectrum. Look for instance also at a new platform in the colored gemstone industry called Gemcloud. They have created the world’s first b-to-b digital marketplace. Unique for the industry the way people and businesses can buy and sell in a transparent way, efficient, fast and safe and how parties are brought together.

Each piece of information about the art or the jewellery is locked into a block, and those blocks are connected to one chain of information. This creates an open distributed ledger that records transactions. As it is distributed, Blockchain is typically managed by a peer-to-peer network working simultaneously together validating new blocks.

We know that Blockchain is a promising new technology. But in real terms, how fast is the art and jewellery sector progressing with these trends?

I would say quite fast honestly. Four years ago several initiatives were launched, almost simultaneously. Think of Tracr initiative by De Beers Group of Companies, for instance, tracking diamonds from mine to market as of 0.5ct.

Same for TrustChain with Richline, basically able to track all the components in one piece of jewellery from mine to market as well, so the gemstones but also the gold for instance. Let’s also not forget the unique system for the colored gemstone sector by Gübelin Labs, called ProvenanceProof.

Companies like IBM, Everledger invest heavily in these initiatives. The Gemological Institute of America has been pioneering with new technology as well. All aimed to enhance provenance and authenticity and to boost consumer confidence in what they buy. We know that nowadays consumers want to know what they buy and whether it is a fair product. That it contributes in a way to society and is not abusing society in any form.

In the art sector, we see amazing new companies like Artory which is the world’s leading art registry with the most comprehensive and immutable secure database for art and objects. They ensure that only the most trusted information available is added to the blockchain. A neutral independent third party expert partner verifies the artwork data and provenance. Another great initiative is the Overstone Art Services. They provide risk scores that help to identify the financial risk and opportunity of an artwork or collection. In a way that art becomes an investible asset with stress tested due diligence and data-powered software tools.

Apart from the trends you mentioned, where do you see the most emerging trends in Fintech vis-a-vis the luxury sector?

Well, there is an amazing amount of research on that topic. But if you ask me I would focus on Artificial Intelligence (AI) & Machine Learning.

AI supports chatbots that act as personal digital assistants to help the consumer in simple transactions. With machine learning these chatbots get smarter every day and fulfilling customer demands much better, in time even more complex matters, and will make customer support friendlier, faster and more efficient.

Another area to focus on is payments. In the diamond industry, for instance, some centers struggle with finance, we know, but also opening bank accounts for payments becomes more and more an issue. Apart from that having direct access to a bank account can be costly or as said impossible.

Hence, we see the growth of cryptocurrencies that are using blockchain technology. So companies send and receive digital money at little to no cost with minimal regulatory oversight. Blockchain and cryptocurrencies are increasingly secure ways to complete digital transactions. A good example is for instance Diamante Blockchain, a US/Indian startup which successfully operates worldwide payments with their blockchain ecosystem. Think also about Facebook introducing the Diem (Libra), reaching billions of users. I’m sure Amazon is looking at these trends as well!

All this is leading to a customer-centric banking model from a product-centric model. For the jewellery sector, I see organizations like CIBJO and RJC working closely with technology companies as technology will solve many challenges we see.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished