Within the art world, more transactions than ever are now taking place on the web. In addition, the coronavirus pandemic increased online sales, raising various safety concerns in the process. A trial lawyer also specializing in art disputes, Daniel Schnapp provides a closer look at how galleries, in particular, can protect themselves online.
"The process of purchasing art has long been a time-consuming affair," reveals attorney Daniel Schnapp, speaking from his office in New York City. On the one hand, he goes on to explain, a shift online has made the process much smoother. Yet, on the other hand, it's also become a much riskier proposition.
As the sale of artwork increasingly transitions from primarily face-to-face to predominantly online, various risks continue to come to light. These risks are reported to include the breach of sensitive information, attempts to defraud, and exposure to possible cyberattacks.
"Cyberattacks, first and foremost, can cost art galleries and collectors alike vast sums of money," says Daniel Schnapp. "The threat of such attacks, as well as the risk of information being leaked or fraud carried out, can also cost all involved their peace of mind," he adds.
While such risks aren't unique to galleries and art collectors, reports suggest that they're a particularly at-risk group. Many large galleries are now reportedly subject to regular online attacks designed to gain access to valuable and often highly confidential financial information.
Many of these attacks are automated, making them relatively straightforward to safeguard against by employing firewalls and other security measures. However, targeted hacking is another matter. "Targeted hacking is much more difficult to prevent," Schnapp explains, "and can leave galleries and their clients open to huge risk."
Schnapp Recommends Three Steps for Safer Online Art Transactions
Targeted hacking is now a very real threat for galleries across the board. With that, Daniel Schnapp has put together a number of tips designed to help safeguard against such eventualities.
First, the expert recommends that all galleries and other art institutions prepare an incident response plan. "If there's a breach in security, it's vital to have any necessary next steps outlined in advance," he advises.
Next, Schnapp stresses the importance of keeping a meticulous inventory of data. "This data should be encrypted wherever possible," says the attorney. Cyberattacks often seek to expose sensitive information about clients and transactions, he goes on to explain, before using this to facilitate fraud.
"By encrypting any such information, the risk of serious harm coming to either party is vastly reduced, even in the wake of a breach," the expert points out. Yet, it's Daniel Schnapp's third and final piece of advice which he says is the most critical.
"Galleries must train every employee to have exceptional cybersecurity habits," he suggests. "For example, all staff should be educated to be wary of any suspicious email communications," he goes on, "or requests to provide commercially sensitive information, even if they appear legitimate."
The differences between legitimate and illegitimate communications can be subtle, Schnapp reveals. "Accordingly, always make a phone call to confirm any financial or otherwise potentially sensitive information requests with the other party."
Daniel A. Schnapp
Attorney
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