Emerging technology. Presentation by Dr Sudheer Singh Parwana 17th January 2019

Transcription

1 Emerging technology Presentation by Dr Sudheer Singh Parwana 17th January 2019

2 Mega trends 5 global shifts changing the way we live and do business Rapid urbanisation Today, more than half the world s population live in urban areas and almost all of the new growth will take place in lesser known medium-sized cities of developing countries. Shift of global economic power Some emerging economies that were growing rapidly are now in recession. Commodity prices have played a considerable role in sending these economies into reverse. Technological breakthroughs The digital revolution has no boundaries or borders. It is changing behaviour and expectations as much as the tools used to deliver new services and experiences. Climate change and resource scarcity As the world becomes more populous, urbanised and prosperous, demand for energy, food and water will rise. But the Earth has a finite amount of natural resources to satisfy this demand. Demographic and social change By 2030 the world s population is projected to rise by more than 1 billion. Equally significantly, people are living longer and having fewer children. Source: 2

3 Scale of innovation Emerging technologies Technical innovations which represent progressive developments within a field for competitive advantage Over 200 emerging technologies currently being developed Low 5G internet speed Estimated download speeds between 1-10 Gbps. Storing data in DNA Ability to store all data ever created within the space of a single lorry for 1000s of years. High 3

4 Essential eight technologies Most likely to have the biggest impact in the short term There is strong consensus on the likely impact of disruptive technologies. Robotics Source: Drones Augmented Reality Virtual Reality Internet of Things 3D printing Blockchain Artificial Intelligence 4

5 Artificial intelligence noun the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages. 232bn UK GDP increase forecast as a result of artificial intelligence Source: 5

6 Virtual reality noun the computer-generated simulation of a three-dimensional image or environment that can be interacted with in a seemingly real or physical way by a person using special electronic equipment, such as a helmet with a screen inside or gloves fitted with sensors. Augmented reality noun a technology that superimposes a computer-generated image on a user's view of the real world, thus providing a composite view. 165bn Global market size forecast for VR and AR by 2022 Source: 6

7 3D printing noun the action or process of making a physical object from a three-dimensional digital model, typically by laying down many thin layers of a material in succession. 18bn Industrial market forecast for 3D printing in bn Aerospace industry 5bn Medical technology sector 2.3bn Automotive sector Source: 7

8 Drones noun a remote-controlled pilotless aircraft or missile. 42bn Net impact on the UK economy by bn Net cost savings from uptake of drone technologies 76,000 Drones in use across UK skies by 2030 Source: 8

9 Robotics noun the branch of technology that deals with the design, construction, operation, and application of robots. 30% of current UK jobs are forecast to be automated by m Jobs in whole and retail trade 1.2m Jobs in manufacturing 1.1m Jobs in admin and support services Source: 9

10 Internet of things (IoT) noun the interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data. 7 trillion Global market size forecast for IoT by bn Number of connected devices by 2020 Source: 10

11 Blockchain noun a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-topeer network billion* Market cap of all cryptocurrencies 2108* Number of cryptocurrencies 52%* Bitcoin market dominance * values as of 16th January 12pm Source: 11

12 Consumer evolution Technology has created a fundamental paradigm shift in consumer behaviours and expectations 70% How do we create a strategy for a business when the past is no longer a reasonable guide to the future? Leo Johnson, Disruption Lead of UK CEOs believe changes in customer behaviours will be disruptive to their businesses over the next five years Source: 12

13 Don t tweak, but transform Why aim for 10% improvement when you can achieve 10x Develop a business strategy fit for a digital age Nurture digital talent and skills Educate and train Be agile and fail fast Invest in tools and technologies Move to the cloud Embed governance Create a collaborative and tech driven culture A successful project requires the following: 1. Strategy 2. Business 3. Data analyst 4. Technology 13

14 The evolution of internal audit Supporting the development of a tech enabled organisation New areas, people, processes and technology areas to review Changing lines of defence New skills and capabilities Opportunity for new IA enablers New risks and controls will emerge as a result of automation. Testing the inputs, rules and outputs will create new challenges, particularly where rulesets are dynamic and artificial intelligence is being used. Blockchain and IoT means that your processes and data may extend beyond your traditional organisational boundaries, and be held with third parties. New rights of audit will be required as well as potential remote auditing solutions. This has a significant security implications, and data security and cyber audits will become even more prevalent. 14

15 The evolution of internal audit Supporting the development of a tech enabled organisation New areas, people, processes and technology areas to review Changing lines of defence New skills and capabilities Opportunity for new IA enablers 1st line will fundamentally change. New technologies will result in new processes and systems and therefore, new risks and controls. 2nd line will evolve to address new risks, for example, Robotics Governance and Monitoring, Analytics Governance etc. Functions addressing the new Compliance and Governance requirements will be required. 3rd line needs to be ready to support It may be called in to: - Assist the 2nd line while it evolves. - Incubate new governance functions that can then be moved into the 2nd line. - Audit the 1st and 2nd lines. 15

16 The evolution of internal audit Supporting the development of a tech enabled organisation New areas, people, processes and technology areas to review Changing lines of defence New skills and capabilities Traditional operational and technology audit teams will need to collaborate to ensure relevance. Identify individuals to enhance the knowledge of your existing teams to: - Assess the risks relevant to each technology and perform fieldwork - Build your own technology enabled auditing capabilities. More flexible delivery models will be required You may need to identify specialist co-sourcing partners to help you deliver and stay current. The types of audit evidence will change. Opportunity for new IA enablers Emerging technology is likely to result in changes to Internal Audit standards be ready to adapt. 16

17 The evolution of internal audit Supporting the development of a tech enabled organisation New areas, people, processes and technology areas to review Changing lines of defence New skills and capabilities Opportunity for new IA enablers Emerging technology reflects a massive opportunity for internal audit to evolve and can help the entire internal audit lifecycle. Intelligent and dynamic risk assessments utilising big data and the IoT. Wearable tech could help your teams deliver quicker and more informed fieldwork. Drones could be used to validate and check assets/stock in the field. Artificial intelligence represent a huge opportunity to deliver continuous auditing as well as to focus audit investigations/gather evidence. Virtual Reality could be used to deliver interactive and immersive reporting. 17

18 12 fundamentals to stay relevant Supporting and nurturing transformation 1. Vision and roadmap 2. Leadership and governance 3. Investment decisions and management 4. Effective and continuous monitoring 5. Horizon scanning 6. Supplier management framework 7. Business continuity and crisis management 8. Ethical and conduct policy 9. Proactive regulatory dialogue 10. A compliance function aligned to emerging technology 11. Cyber security (including data protection, IP protection and IdAM) 12. Re-imagined controls 18

19 Thank you pwc.com Dr Sudheer Singh Parwana Director and Midlands Emerging Tech Leader Mobile: +44 (0) All rights reserved. Not for further distribution without the permission of. refers to the network of member firms of PricewaterhouseCoopers International Limited (IL), or, as the context requires, individual member firms of the network. Each member firm is a separate legal entity and does not act as agent of IL or any other member firm. IL does not provide any services to clients. IL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm s professional judgment or bind another member firm or IL in any way.