Asset manager bets on blockchain for private equity audits

A 130-year-old wealth and asset manager is using blockchain - the latest technology reshaping financial services - to speed up the auditing of private equity lifecycle events.

Northern Trust is assigning blockchain nodes to audit firms, which will give them access to a "golden copy" of fund data which is essentially an immutable master file. While auditing a specific lifecycle event, auditors will be able to access parts of the blockchain's golden copy which relate to the event.

Auditors can then import this data to their firm's internal software to complete the audit or develop software tools to audit direct on the blockchain.

"By expanding our private equity blockchain ecosystem to the audit community, Northern Trust has enabled audit transactions to be recorded on a blockchain in real time. This will result in direct efficiencies to both the audit firms and Northern Trust, and provide investors with a more timely and valued assurance product," Northern Trust president of corporate and institutional services Pete Cherecwich said.

Northern Trust launched its first commercial deployment of blockchain for private equity in February, 2017.

The US-based organisation has been growing its Australasia presence.  Last year, it tapped in a former general manager for ASX's clearing services, Danielle Henderson, as a senior vice president for its Sydney office.

The blockchain auditing solution was developed in-house and is based on the open source Linux Foundation HyperLedger Fabric. It packs on a layer of security with IBM Cloud's hardware-assisted cryptography.

Read more: Northern TrustDanielle HendersonIBM CloudLinux Foundation HyperLedgerPete Cherecwich
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