Building blocks: How financial services can create trust in blockchain

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

Overview

Blockchain is one of the more exciting—and more misunderstood—emerging technologies. It essentially offers a decentralized ledger of all transactions across a network. But for a technology to gain wider acceptance in the business community, promoters need to acknowledge and address the skeptics. Can you help your internal audit team trust it? We say yes – and blockchain assurance will help the technology make the transition from experimentation to broad acceptance.

What is blockchain and why should you care?

A blockchain is a decentralized ledger of transactions across a peer-to-peer network. It could offer financial services firms a more effective way to handle a whole range of transactions, with use cases like payments, derivatives, settlement, securities, syndicate lending, trade finance, and more. Although blockchain technology is still maturing, one of the most significant issues involves assurance that it works, even more than details about how it works.

What’s causing concern for internal audit?

Here are a few reasons why Internal Auditors might struggle with blockchain:

  • Blockchain is very new. The first implementation was less than a decade ago.
  • Controls are new, too. This could lead to uncertainty around control implementation, access rights, and monitoring.
  • Technical expertise is rare. Even in IT departments, few firms have deep experience. It can be even harder to find in control functions.

Despite the uncertainty, you can rest assured

To help move beyond the uncertainty, firms should consider steps such as:

  • Evaluating the business use case and needs of all stakeholders. 
  • Assessing the underlying cryptography.
  • Examining how their specific network has been set up, how reports are generated, and the controls that exist over the blockchain.
  • Performing ongoing reviews to assess the effects of any systemic changes.

The blockchain technology can bring an array of benefits to companies. However, this will require companies to assure stakeholders that blockchains have been set up effectively with appropriate reviews and controls.

To continue reading, please download the full article

loading-player

Playback of this video is not currently available

PwC on 2017, blockchain, and what firms should do going forward

PwC's John Garvey discusses if 2017 will be the year of blockchain and how institutions should develop it going forward. All new technologies take significant development and capital outline, and blockchain is no exception. Financial institutions have specific things they can do in 2017 to avoid getting left behind.


How PwC can help

Our teams in asset and wealth management, banking and capital markets, and insurance are helping our clients tackle the biggest issues facing the financial services industry. With professionals across tax, assurance, and advisory practices, we can help you find ways to thrive even in a period of uncertainty. Whether you're preparing for regulatory changes, putting FinTech/InsurTech to work, or rethinking your human capital strategy, we work together with you to deliver value to your business.

For more information on how PwC can help with blockchain, reach out to one of our leaders below or explore our blockchain services.
 

Contact us

A. Michael Smith
Internal Technology Audit Solutions Leader, PwC US
Tel: +1 (646) 471 9580
Email

Chris Curran
Chief Technologist, PwC New Ventures, PwC US
Tel: +1 (214) 754 5055
Email

Follow us