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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
1
February 2018Emerging technology – Auditing the future
Source: PwC's 21st CEO Survey
PwC
Definition: Emerging technology
3PwC
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
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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
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?
10PwC
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
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6 pillars ofprojectsuccess
Visionand purpose
February 2018Emerging technology – Auditing the future
PwC
Emerging technology – Internal impact
6 pillars ofprojectsuccess
Visionand purpose
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• 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
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1 2 3 4
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
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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
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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