Certain studies have suggested that increase in cyber-attacks and rise in global payment processing cost have hit global banking and finance…

The strengths of blockchain can also be its weaknesses. The inability to reverse transactions and to access data without the required keys make the system secure but also means that organisations need specific protocols and management processes to ensure that they are not locked out and have clear contingency plans. Operating through network nodes could also expose the organisation to cyber-attacks and data hacks, so security issues are important. Auditors should consider the appropriate governance and security around the transactions. Although blockchain's core security premise rests on cryptography, there are risk factors associated with it. As blockchain interacts with legacy systems and business partners, concerns related to insecure application programming interfaces (APIs), data confidential and privacy cannot be ignored. Weak blockchain application development protocols are something auditors cannot overlook. Similarly, data privacy laws and regulations may be an area of concern as data are communicated across geographic boundaries. Auditors must be able to determine whether the data put on blockchain will expose the enterprise for non-compliance with applicable laws and regulations. Auditors should also ensure that the organisation has the necessary data management processes which complies with regulations. The regulatory landscape is still evolving for blockchain so audit teams should check that compliance managers are following developments constantly and adapting processes accordingly.