"Big four" professional services firm Ernst & Young (EY) suggests that blockchain technology could transform the firm's finance operations and redefine the role of chief financial officer (CFO) in a report published last week.

"Blockchain could revolutionize the way finance function operates," the report reads. "It will arm the CFO with tools and capabilities to allow him or her to become a key business partner in the strategic planning process while running a very efficient and trustworthy operation."

The report identifies CFO-related blockchain uses cases, noting that the technology can help executives meet objectives such as "getting your house in order," business development and communication with the external marketplace.

More specifically, the report suggests the implementation of a blockchain-based auditing system could fundamentally alter the "scope and approach of an audit opinion" from its existing focus on evaluating transactions to "confirming the validity of digital representation of physical assets and codification of contracts."

Likewise, EY claims the technology could decentralize organization structures, creating network systems which would provide better visibility and integration across an organization.

The report also argues that the transparency provided by blockchain technology could have an impact outside the organization too, allowing competing firms to have access to each other's information, facilitating a more "collaborative and multi-enterprise environment."

However, the authors caution that blockchain is still a nascent technology and, as such, its potential is not fully understood. Similarly, the report reads, "organizations should make sure they are not comparing the theory of blockchain with the practical nature of technology implementations."

There are also obstacles to adopting blockchain-based systems, the authors say, explaining:

A paucity of knowledge about blockchain tech is also likely to encumber its adoption, EY said.

EY image via Shutterstock