KPMG partners with Microsoft to develop blockchain-compatible toolkit

Global audit firm KPMG yesterday launched a set of tools designed to help banks and other financial services firms leverage blockchain technology in a compliant way.

The global auditing giant, which had revenue of $24 billion last year, has expanded its partnership with Microsoft to integrate its Blockchain-as-a-Service (BaaS) tool in order to formalize its distributed ledger work.

Eammon Maguire, head of distributed ledger services for KPMG in the United States and globally, one of the world's four largest auditing firms, said the news was more than just a promotion of Microsoft's achievements in distributed ledger technology.

Maguire pointed out that it is very important for our company to remain neutral in providing advice to clients. KPMG has established a number of strategic alliances, which are in different stages of development.

He said:

“We are merging our own pre-existing process expertise and regulatory expertise with our blockchain expertise.”

To that end, KPMG’s Digital Ledger Services will focus on supporting blockchain applications ‘throughout the lifecycle,’ meaning the firm is offering a range of services, from business use case development to systems and operational integration.

These services support the integration of management consulting and risk consulting with regulation as the 'backbone' of the work.

However, while Macguire described the collaboration with Microsoft as ‘very important’, he asserted that KPMG is currently looking for “other alliances” to bring expertise in the field of KYC compliance to its services.

Macguire said:

"We have some partnerships with other companies as well, but they are not as formal as with Microsoft."

Blockchain for regulated industries

To help companies build compatible blockchain applications, KMPG has expanded its existing partnership with Microsoft, which is already underway.

The accounting firm has been co-developing multiple service suites in data analytics, compliance and business solutions with the software giant since March 2015, and this can be seen as an expansion of the existing partnership.
Currently, Microsoft is offering its blockchain platform to help customers in "highly regulated" industries, including financial services, healthcare and government.

The new area of ​​collaboration is designed to help customers move efficiently and securely to cloud storage while gaining the efficiencies of blockchain.

Marley Gray, Microsoft’s blockchain business development lead, said in a statement:

“We are pleased to expand our partnership with KPMG to develop blockchain services.”

The fact that IBM and Microsoft have expressed interest in blockchain shows that enterprises remain very confident that private blockchain services will require hosting and security, both of which competing companies hope to provide.

Expanding operations

In total, KPMG has assigned about 80 people to work specifically on blockchain. Headquartered in New York, the team’s experts are scattered across the United States.

However, according to Maguire, they have a total of 160 people around the world who have been cross-trained to provide blockchain services.

This global team includes data and analytics teams working on coding and developing proofs of concept, prototyping and integration of blockchain capabilities.

Some of the team met with representatives from other firms in the 'Big Four' audit community in New York last month to discuss the benefits of forming an alliance of accounting firms.

However, the proposal is still in the discussion stage by the Accounting Firms Alliance, a project organized by Brooklyn-based firm ConsenSys that is investigating the potential global benefits that blockchain technology could bring to the accounting industry.

Macguire said an update on the conversations would be released soon.

Macguire concluded:

“Ultimately, we’re going to see blockchain become a service delivery platform. We’re going to see audit firms and regulators using blockchain for analytical processes.”