The average business man…or woman… on the Isle of Man is a lot more educated about the blockchain than their counterparts elsewhere – mainly because it has been on our radar since June 2014, when the Department of Economic Development issued its announcement that the Isle of Man intended to take specific actions aimed at helping protect businesses and customers utilising digital currencies and provide an environment for high quality businesses in this rapidly emerging field who wish to operate here.
In early September 2014, the Isle of Man Chamber of Commerce held a lunch at which KPMG Director, Russell Kelly, chaired a panel which aimed to ‘Decrypt the Myths’ around cryptocurrencies and the blockchain, and later that month KPMG was lead sponsor of the summit which explored establishing a ‘CryptoValley’ here amongst our green hills.
Despite this higher level of education, there was still a lot of confusion about what blockchain really was, and there wasn’t yet widespread understanding of its applications outside Bitcoin. In order to address that confusion, KPMG invited Preston Byrne, a fellow of the Adam Smith Institute, to speak at their 2015 eSummit on ‘Blockchain 2.0’.
Preston described blockchains as “a pretty interesting peer-to-peer infrastructure”. A blockchain is two things, he explained, a database, or the transaction history of a group of users using that particular blockchain. In addition, a blockchain is also a protocol, or a series of rules which govern how that database functions. Keen to demystify this area, Preston stressed ‘it’s just software’ and set out the myriad of applications that software can have for any business or government looking to manage data in a transparent, efficient and controlled manner.
Since then, the interest of the global business community, particularly in financial services, when it comes to blockchain has increased exponentially. If we look back just at the past 3 months, there have been a procession of announcements:
So it is clear that we need to sit up and pay attention to the blockchain – and KPMG is doing so. We describe the blockchain simply as a ‘Digital Ledger’ and our aim is to help financial services companies to implement blockchain technology.
To achieve that aim, the KPMG Digital Ledger Services team provides a comprehensive suite of services that is designed to help financial service firms realize the potential significance of blockchain; utilising the distributed ledger technology to provide faster and secure transactions, reduces costs, streamlines and automates back office operations.
As the recently appointed head of Digital Ledger Services for the KPMG Islands Group (covering the Channel Islands, Gibraltar, Malta, Bermuda and the Caribbean), I met with KPMG’s global head of Digital Ledger Services, Eamonn Maguire, in New York recently.
As Eamonn explained; “The Blockchain represents not only a dramatic shift in how financial services organizations will manage transactions in the future but also how they structure their internal operations going forward. This is something that all financial services companies must be considering and accelerating"
KPMG’s Digital Ledger Service provides full support at every stage of development from proof of concept to designing use cases, deploying systems, and operations with the help of ongoing management support. The services by KPMG will incorporate strategic realization, requirements guidance, systems, and operations integration, among others.
Additionally, KPMG is expanding its partnership with Microsoft that will help clients to move securely and efficiently to cloud for storage at the same time as adopting disruptive blockchain technologies; "We're excited to be expanding our efforts with KPMG to develop blockchain services. The global availability of Microsoft Azure, with its hybrid cloud capabilities, extensive compliance certification portfolio, and enterprise-grade security help to enable blockchain adoption, especially in highly regulated industries like financial services, healthcare and government," Marley Gray, director of business development & strategy for blockchain at Microsoft said.
Across its member firms worldwide, KPMG has dedicated more than 80 partners and executives to focus on blockchain, including our industry leading Data and Analytics services that will focus on coding and development in support of proof of concept, prototyping and integration of blockchain capabilities.
In addition to increasing the speed and security of transactions worldwide by using cryptology, blockchain technology also can be used to reduce costs by leveraging cloud technology and improve regulatory compliance by offering detailed factual evidence and a solid audit trail of transactions for auditors and regulators.
Currently, KPMG is working with clients worldwide on a range of global blockchain projects. Among these projects is the qualification of a blockchain solution for a major bank’s global payments, the development and prototyping of smart contracts in insurance and involvement in blockchain workshops across Canada and Europe.
If you want to know more about the blockchain, or KPMG’s services in this area, please contact Head of Digital Ledger Services, Micky Swindale.