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How Big Four Auditors Delve Into Blockchain: PwC, Deloitte, EY and KPMG Approaches Compared

PricewaterhouseCoopers (PwC), Deloitte, Ernst & Young (EY) and KPMG, better known as the “Big Four” auditors, all have established solid long-term blockchain roadmaps to remain relevant in the cryptocurrency and blockchain space.

The four professional services conglomerates, which combined employ over a million individuals, have different roadmaps and perception of the future of the blockchain industry. Deloitte for instance, the biggest auditor out of the four with an annual revenue of around $43.2 billion, has stated that the blockchain sector is close to seeing a breakthrough with the technology.

“Ultimately, [blockchain is] more of a business model enabler than a technology…for legacy organizations…we’re starting to see a change in approach toward blockchain. Executives in these organizations are moving away from the pure platform view of ‘What is it?…let’s find a use case’ toward development of more sensible, pragmatic business ecosystem disruption.”

–Deloitte’s 2018 blockchain survey, published August 27

In contrast, PwC, which has been directly involved in the cryptocurrency market through its investment in VeChain (VET) since May 4, a China-based Internet-of-Things (IoT) blockchain network, expressed its concerns over the uncertainty in blockchain regulation.

PwC blockchain head Steve Davies explained that a large number of conglomerates and startups are exploring ways to integrate the blockchain at a commercial level. But, regardless of the increase in demand for the blockchain, regulatory hurdles in integrating the decentralized technology has limited companies from utilizing the blockchain to process information:

“Businesses tell us that they don’t want to be left behind by blockchain, even if at this early stage of its development, concerns on trust and regulation remain. Blockchain by its very definition should engender trust. But in reality, companies confront trust issues at nearly every turn.”

Generally, the Big Four have reaffirmed in recent reports that the interest in blockchain technology is rising rapidly, especially amongst high profile conglomerates such as Microsoft, IBM, JPMorgan, and Goldman Sachs.

However, many experts including US Securities and Exchange Commission (SEC) commissioner Hester Peirce believe that over-regulation in an industry that is still at its infancy could limit a wide range of developments, ultimately damaging the growth of the crypto and blockchain space.

During a speech delivered on September 12, commissioner Peirce said:

“The Commission should not default to a demand that the crypto markets be subject to comprehensive government regulation as a precondition to allowing products linked to those markets to be traded in markets that we regulate.”

While the Big Four acknowledge the lack of regulatory certainty in the space, the four conglomerates have made significant efforts in understanding the market to assist large corporations to integrate the emerging technology.

PwC: investment in VeChain, 1,000 staff in the blockchain, targeting the Swiss banking space

Despite its concerns in regard to regulatory uncertainty in the market, PwC has been the most active professional services conglomerate in the crypto and blockchain space.

Most recently, PwC announced that through a program called “Digital Accelerators Program,” more than 1,000 employees of the company will be trained in the area of blockchain and cryptocurrency.

Over the next two years, Sarah McEneaney, digital talent leader at PwC and head of Digital Accelerators, stated that to meet the increasing demand for blockchain by its clients and competitors, the firm decided to engage in a major initiative to solidify its position at the forefront of blockchain development:

“It just seems table stakes at this point that people should have more technology skills. It’s needed for us to remain competitive and to be responsive for what our clients are also going through…our clients are looking for us to do things more digitally and control the cost of what we’re doing.”

As a professional services conglomerate, the core business model of PwC revolves around its auditing and consulting services that are provided to high profile corporations in major industries like finance, technology and manufacturing.

Hence, in her statement, McEneaney acknowledged that a large portion of its client base that is composed of large-scale corporations have started to demonstrate big interest and demand for the technology.

It is possible that PwC criticized the over-regulation of the blockchain space in its recently publishedstudy because its clients and large corporations in various industries are unable to integrate blockchain technology at a meaningful capacity to demonstrate the potential of the technology.

Still, Pierre-Edouard Wahl, the head of blockchain digital services at PwC Switzerland, told Cointelegraph in an exclusive interview that the corporation is targeting the Swiss banking and finance sector with blockchain-based products.

In July 2018, SIX, the main stock exchange of Switzerland, announced that it will launch a fully regulated cryptocurrency exchange by 2019. The public release of the finalized plan of SIX was met with optimism in the global cryptocurrency market, as it was the first announcement of a major stock exchange to be directly involved in the asset class. In the following month, ICE / NYSE, Starbucks, and Microsoft launched a regulated cryptocurrency trading platform Bakkt.

According to McEneany, blockchain technology could negatively impact the current business model of major banks and financial institutions in the short-term, as it eliminates third-party service providers and mediators in the process of settling payments.

In the long-term, however, McEneany stated that blockchain will enable banks, as institutions, to adopt the technology. This is similar to how Ripple has convinced banks like BBVA and Banco Santander to utilize the blockchain in processing cross-border payments, the technology may improve the existing solutions of banks.

“I actually think it will be an enabler. Yes, it might hurt their existing business, but that is often the case with the new technologies: It’s either you adopt them and you think differently about how those technologies are going to actually offer new solutions — as well as improve the existing solutions — or then you just look at the improvements, and we are all racing to the bottom, because there are less and less margins for everyone.”

PwC invested in VeChain, a major cryptocurrency with a market valuation of $711 million in May with the vision of utilizing the IoT-focused blockchain to enable the existing infrastructures of large-scale partner conglomerates of PwC.

Raymund Chao, PwC Asia Pacific and Greater China Chairman, said at the time:

“We are glad to establish a deeper relationship with VeChain, which aims to build a trusted and distributed business ecosystem to help address long-standing challenges in supply chain management, food trust and anti-counterfeiting areas. VeChain’s mission aligns with PwC’s purpose of solving important problems and building trust in society.”

To be continued……


Author: Joseph Young

Link of the article: https://cointelegraph.com/news/how-big-four-auditors-delve-into-blockchain-pwc-deloitte-ey-and-kpmg-approaches-compared

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