Deloitte Lists Key Principles for Blockchain Adoption in Financial Sector
Deloitte, one of the largest accounting services providers and the largest professional services network worldwide, published a report that lists the key principles needed for blockchain adoption at the global level.
Deloitte Touche Tohmatsu Limited, a UK-incorporated consulting company, recently published a report which discusses the potential applications of blockchain technology in the financial sector and lists key advisory principles. The report was compiled by Deloitte EMEA Blockchain Lab in Dublin, together with Deloitte Hong Kong and US.
The publication mentions six principles required for distributed ledger technology’s (DLT) adoption around the world:
Best practice – Standards for Blockchain Development
Interoperability and System Integration Controls
Enhancement of Traditional ICT Controls
Business Continuity Planning
Lory Kehoe, leader at Deloitte EMEA Blockchain Lab, said that blockchain has:
“attracted significant attention from the financial services industry in EMEA and around the globe, with many organizations exploring different structures and governance models as they move from exploration to implementation.”
He also referred to the six principles described in the report:
“Failure to consider these principles, or to consider them in isolation, may become riskier as alignment between business and IT is critical for successful implementation of this new and powerful technology.”
The first in the list of principles – Best-practice standard for blockchain development – focuses on three critical factors required for blockchain adoption at the global level: governance, legal, and regulation.
The next principle – Interoperability and System Integration Controls – discusses the potential of blockchain technology to be fully integrated with existing systems. Four essential attributes need to be considered in this area: security aspects, compliance with legacy systems, data integration, and security approaches.
On the third principle, Audit Rules, Deloitte concluded that blockchain tech would not “automate audits entirely and will not make the role of the auditor obsolete, but rather it will change some of the processes.” The report says that auditors will also have to operate with information outside the blockchain.
Deloitte says that blockchain is connected with cybersecurity aspects per se. On the fourth principle, the report says:
“Security considerations in relation to the cryptographic and immutable nature of blockchain technology include:
Risk of an attacker overpowering a private blockchain;
Centralization of authority within the network;
Privacy and the right to be forgotten.”
The report goes on to conclude that the decentralized nature of blockchain requires a different methodology when it comes to the management of Information and Communication Technology (ICT) controls.
In regards to the last principle, Business Continuity Planning (BCP) in the context of DLT, the report said that it would “cover the loss of data and processing capability due to loss of servers or connectivity, and risks such as cybercrime.”
The authors of the report are Lory Kehoe, who is also Director of Deloitte Ireland, Eric Piscini, Principal at Deloitte US, Paul Sin, Partner at Deloitte Hong Kong, and Eoin Connolly, Technical Architect at Deloitte Ireland.
Earlier, UBS, the largest financial company in Switzerland, also published a report that stressed on blockchain technology’s potential to add value in different sectors.