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Emerging technology – Auditing the future ISACA Event (Manchester, Feb ‘18) www.pwc.com February 2018

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Emerging technology –Auditing the future

ISACA Event (Manchester, Feb ‘18)

www.pwc.com

February 2018

PwC

Gautam Prakash

Senior ManagerRisk Assurance (Digital Integration)

E: [email protected]: 0773 006 8899

Introduction

More than 10 years working with PwC across a number of industries and geographies specialising in ERP process, security and controls.

I come from the city of the seventh wonder 'Taj Mahal'!

I am a ‘Maker’ at heart and enjoy tinkering around with gadgets. Currently, I am working on restoring an old American wallbox (ask me if you don't know what this is) and getting it to play my music from Spotify!

February 2018Emerging technology – Auditing the future

PwC

Emerging technology megatrend

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February 2018Emerging technology – Auditing the future

Source: PwC's 21st CEO Survey

PwC

What is emerging technology?

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February 2018Emerging technology – Auditing the future

PwC

Definition: Emerging technology

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February 2018Emerging technology – Auditing the future

• Technologies which arise from new knowledge, or the innovative application of existing knowledge

• Systemic and long-lasting economic, social and political impacts

• Create new opportunities for and challenges to addressing global issues

• Changes the status quo

PwC

Emerging technology – The three pillars

Digital automation

Internet of things, Block

chain, AI, Robotics

Drones, 3D Printing,

wearables

Virtual reality, Augmented reality, Data

analysis

Physical devices

Visualisation and data

Blockchain

IoT – PervasiveComputing

Connectedentertainment

Cybersecurity

Robotics

Biometrics

Genomics

ArtificialIntelligence

Cloud oncloud

Digitalhealth

Biosolar

3G

HANP

Memristors

High AltitudeNetworking

Wearables

4D

Memorymaterials

Contextualcomputing

Bionics

3D printing

Drones

Surveillance

3G networks High resolutioncapture and display

AugmentedReality

3D Xpoint

VirtualReality

Analytics

4

February 2018Emerging technology – Auditing the future

PwC

How does it work?

RPA applications aggregate data from multiple source to develop an integrated single view of all the business processes enabling them to interpret existing application and thus reduce the requirement for human intervention.

RPA is not:

• A humanoid robot

• Something that can entirely replace a human

• Something that can mirror human cognitive processes (yet)

Emerging technology – Auditing the future February 2018

What is Robotic Process Automation?

PwC

What is Artificial Intelligence?

Artificial intelligence is intelligence exhibited by machines, rather than humans or other animals. In computer science, the field of AI research defines itself as the study of "intelligent agents": any device that perceives its environment and takes actions that maximize its chance of success at some goal. and "problem solving".

Colloquially, the term "artificial intelligence" is applied when a machine mimics "cognitive" functions that humans associate with other human minds, such as "learning“.

(Wikipedia)

Artificial Intelligence

PwC

On that note…

February 2018Emerging technology – Auditing the future

PwC

Blockchain

February 2018Emerging technology – Auditing the future

PwC

Blockchain

February 2018Emerging technology – Auditing the future

Blockchain is "an open,

distributed ledger that

can record transactions

between two parties

efficiently and in a

verifiable and permanent

way."[8]

For use as a distributed

ledger a blockchain is

typically managed by a

peer-to-peer network

collectively adhering to a

protocol for validating

new blocks.

Once recorded, the data

in any given block

cannot be altered

retroactively without the

alteration of all

subsequent blocks,

which needs a collusion

of the network majority.

(Wikipedia)

PwC

Why are organisations investing in emerging technology?

Improve efficiency, effectiveness and

performance

Enable pace and agility to customer and market needs

Protect organisation value i.e. reputation,

data leakage

Competitive advantage and market share

Whilst the benefits of emerging technology are potentially game changing, the risks associated with accessing these benefits can also be high. In an environment that is quickly evolving, this becomes a critical area to get right.

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February 2018Emerging technology – Auditing the future

PwC

What is the impact of emerging technology?

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February 2018Emerging technology – Auditing the future

PwC

Emerging technology – External impact

• New ways of interacting with suppliers and customers

• Different experiences and channel mixes

• New/changed working practices

• Unions and Employment Law implications

• Regulation keeping up with practice

• New and changed market entrants/competition

Nature of impact on the external world

12

6 pillars ofprojectsuccess

Visionand purpose

February 2018Emerging technology – Auditing the future

PwC

Emerging technology – Internal impact

6 pillars ofprojectsuccess

Visionand purpose

13

• Reporting lines

• Blend of people and automation

• Replacement of some human activity

• Speed of innovation and to market

• Access to new customers

• New types of 3rd parties

• Additional compliance requirements

• Opportunities for additional remote working/operations

• Data volumes

• Technology integration

• Conduct

• New lines of defence especially second.

Nature of impact on the internal world

February 2018Emerging technology – Auditing the future

PwC

Emerging technology – 12 things to keep us safe

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Horizon scanning

Proactive regulatory dialogue

5

9

Supplier management framework

A compliance function aligned to emerging technology

6

10

Business continuity and crisis management

Cyber security (including data protection, IP protection and IDAM)

7

11

Leadership and governance

Investment decisions and management

Vision and roadmap Effective and continuousmonitoring

Ethical and conduct policy

8

Re-imagined controls

12

1 2 3 4

February 2018Emerging technology – Auditing the future

PwC

What does this mean for Audit?

15PwC

February 2018Emerging technology – Auditing the future

PwC

Emerging technologies introduce ‘new risks’ in existing domains

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Data security/privacy

Identity and access management

Compliance Data ownership and governance

Transparency and controls

Health and safety Third party contract and performance risk

Availability, reliance and resilience

Technology integration

Brand and reputation

Intellectual property Liability Fraud, error and waste

Hyper-connectivity …

February 2018Emerging technology – Auditing the future

PwC

Emerging technology – What does this mean for Audit?

Embracing these new technologies offers significant opportunity to develop the next generation of Audit functions

New risks and controls will mean that the 1st line

changes, the 2nd line evolves and the 3rd line

needs to be ready!

As organisations embed emerging technology there will be the need for

audit to review them

As the types of audits you perform change, you will need to identify

people with new skills and capabilities in these areas

New areas, people, processes and technology to review

New/different skills and capabilities

Op

po

rtu

nit

y f

or

ne

we

na

ble

rs

Ch

an

gin

g lin

es

of d

efe

nc

e

1

2

3

4

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February 2018Emerging technology – Auditing the future

PwC

The rise of the Tech Savvy auditor

23

Definition 1: ‘To be tech savvy is to be knowledgeable and proficient in the understanding and use of technology, especially computers.’ (Definitions.net)

Definition 2: ‘Knowing a lot about modern technology, especially computers.’ Cambridge English dictionary

We use the three building blocks and philosophies to drive innovation, quality and insight, leveraging data and technology in our audit.

Underpinned by PwC’s oil and gas sector expertise and experience

Are naturally curious about technology/data/cyber security

Can identify possible applications of technology and data in their work

Actively ask to be involved in technology/data/cyber audits and discussions

Regularly keep up to date with the latest technology, data tools, blogs, attend open training and are seen as an early adopter (gadgets galore)

Are able to understand and articulate data, cyber security and technology risks

Are able to interpret the findings from data/technology/cyber security based reviews and make informed recommendations

Know when to call in an expert i.e. where deep subject matter expertise is needed.

2

3

4

5

6

7

1

Tech Savvy auditors

February 2018Emerging technology – Auditing the future

PwC

How to encourage a ‘Tech Savvy auditor’ environment

24

1 2 3 4 5 6

Spot them early Provide an outlet for

their curiosity

Encourage them to

join external networks

Ask ‘how can technology and data help’

for each key activity

Get technology on the agenda

of each key meeting

Get connected, befriend your

IT/Digital/Cyber/Legal

and Data function

February 2018Emerging technology – Auditing the future

PwC

What should you do right now?

Get informed Get prepared

Get engaged Get going

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February 2018Emerging technology – Auditing the future

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this

publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this

publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to

act, in reliance on the information contained in this publication or for any decision based on it.

© 2018 PwC. All rights reserved. “PwC” refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for

further details.

170913-082405-LM-OS