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Private Equity Auditing in Real Time Using the Blockchain Technology is Now Possible Thanks to Northern Trust

After launching its first commercial tool for private equity auditing last year, Northern Trust announced a new method of auditing private equity using the blockchain technology. The interested audit companies can now use a blockchain network to directly perform audits of private equity.

The announcement was made in a press release published on the official website of Northern Trust. In the release, the company pointed out that any auditing company, as tested by PwC, one of the biggest players in the audit industry, could perform its auditing operations of the funds registered in a blockchain network, making the whole process faster, transparent and more efficient.

The solution offered by Northern Trust is based on Hyperledger Fabric, an open code infrastructure of the Linux Foundation developed by IBM. It will also be using a platform called IBM Cloud to develop and execute the network with cryptography assisted by hardware and administration of keys to improve the security and the scalability of these transactions.

This tool will allow every company to have its own blockchain node that gives it access to relevant data about the funds in order to perform auditing operations in real time. The press release says this could also facilitate the development of new tools that would be used to complete the audit within the same blockchain network.

This way, the companies access the so-called golden copy from their offices. The golden copy is a main immutable record containing the specific data about the fund. Afterwards, the required data is transferred to the internal applications and the auditing process is complete. Nick Vermeulen, a partner at PwC said: “Our ability to directly access distributed ledgers such as the one within the Northern Trust system will allow us to build upon our own blockchain investments. Such innovation assists clients as they invest in the opportunities arising from emerging technologies. This ongoing process will help ensure we are in the best possible shape to adapt in the coming years of change.”

On the other hand, Pete Cherecwich, the president of Corporate & Institutional Services at Northern Trust added: “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 is one of the leading companies in the sector of wealth management, asset servicing, asset management and banking. Its services are used by corporations, institutions, affluent families and individuals. The company was founded back in 1989 and has offices in 19 US states, as well as in Canada, Europe, the Middle East and Asia. This is not the first time Northern Trust is dealing with the blockchain technology. In March last year, the company launched a solution based on the blockchain technology for the management of private equity in cooperation with IBM. This solution is now applied by PwC.

Moreover, in May last year, Northern Trust announced its goal to expand its services based on the blockchain technology by implementing the beta version of its Fabric project.


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