Northern Trust has opened its private equity blockchain network to audit firms, allowing them to verify fund transactions in real time. The fund administrator announced the expansion with Pricewaterho
Northern Trust has opened its private equity blockchain network to audit firms, allowing them to verify fund transactions in real time. The fund administrator announced the expansion with PricewaterhouseCoopers and other audit firms in Guernsey. The system builds on Northern Trust's 2017 launch of the first commercial blockchain application for private equity.
Auditors can run their own blockchain nodes and access what Northern Trust calls a "golden copy"—an immutable ledger containing a definitive record of all fund transactions. No more disputes over documentation. Audit firms can extract this data and integrate it with their existing software, or they can build fresh tools that pull information straight from the blockchain.
Northern Trust built the network on the Linux Foundation's open-source Hyperledger Fabric, operating it through IBM's Blockchain Platform on IBM Cloud. Cryptography and key management protocols protect the transactions.
Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust, said: "By expanding our private equity blockchain ecosystem to the audit community, Northern Trust has enabled audit transactions to be recorded on a blockchain in real time. This will result in direct efficiencies to both the audit firms and Northern Trust, and provide investors with a more timely and valued assurance product."
Nick Vermeulen, a partner at PwC Channel Islands, said: "Our ability to directly access blockchains such as the one within the Northern Trust system will allow us to build upon our own blockchain investments. Such innovation assists clients as they invest in the opportunities arising from emerging technologies. This ongoing process will help ensure we are in the best possible shape to adapt in the coming years of change."
Blockchain carries a reputation rooted in cryptocurrency, a connection forged when Bitcoin and the wave of digital assets that followed seized public attention through extreme price moves and high-profile security breaches. Traditional finance conflates the technology with crypto skepticism.
Northern Trust's private equity auditing project demonstrates blockchain handles work financial institutions already do, except with stronger transparency and quicker execution. Administrators and auditors deploying blockchain for core operations reframe the conversation from speculation to infrastructure. Expanding blockchain adoption across private equity, compliance, and capital management could transform how financial institutions approach verification and trust. A tool initially designed for auditing might reshape financial institutions' thinking about decentralized systems.
