Innovate with confidence
Organizations in every industry are experimenting with how to use blockchain’s distributed ledger technology for a wide range of use cases including financial services, cash settlement, smart contracts, supply chain, provenance and more.
As technology and business teams move from the pilot stage to production of their private blockchains, questions around risks and controls arise. While blockchains themselves are tamper-proof, solutions built around the technology are subject to risk—just like any other IT implementation.
A new audit approach is needed, one that leverages technology, accommodates increased transaction volume and provides real-time data. What’s needed is a validation solution.
“The business value-add of blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030.”
There is currently no standard way to validate blockchain-based business processes and the related control environment.
PwC’s solution combines our patent-pending risk framework with our proprietary continuous auditing software. It is currently the only standard that exists for risks and controls in the blockchain space for private business blockchain processes.
This framework identifies six risk domains with supporting subcategories that outline blockchain system considerations. It addresses overarching governance and cybersecurity concerns, illustrating the need to assess any blockchain implementation in context with the rest of the enterprise. Information gained by employing the framework can be used to configure the Blockchain Validation Solution Software.
Based on the assessment of the client’s unique blockchain architecture and use case, the software is customized to reflect the company’s risk thresholds and to meet the needs of its different stakeholders.
The software is set up as a ‘read-only’ node on the blockchain to monitor and log all transactions as they occur, in order to apply appropriate controls and continuous testing of all transactions. Transactions that meet specific criteria can be flagged for user review and escalated as needed. All key stakeholders can view customized reports via a user-friendly dashboard. Finally, as risk and control objectives change, the company can adjust the software settings to meet its new requirements.
Near real-time continuous testing
Application is integrated into the blockchain as a ‘test node’ to gather the data.
Information is continuously available in a configurable interface.
On-demand data can be accessed to meet the needs of key stakeholders.
PwC’s Blockchain Validation Solution helps management teams innovate with confidence.
A. Michael Smith
Internal Technology Audit Solutions Leader, PwC US
Risk Assurance Leader, PwC US
US Assurance FinTech Leader, PwC US