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NEW YORK (Reuters) - Accenture Plc has developed new technology that it says can help make blockchain applications more secure and could speed up their deployment in sectors such as finance.
The professional services firm on Wednesday unveiled a system that makes it easier for blockchain users to store their security credentials in hardware security modules (HSM), or highly secure processors that are specifically designed to safeguard passwords and "digital keys."
Blockchain, which first emerged as the system powering crypto-currency bitcoin, is a shared record of transactions that is maintained by a network of computers on the internet, instead of a centralized authority. Banks and other large financial institutions have been ramping up their investments in blockchain in hopes that it can help simplify cumbersome processes such as securities settlement and international payments.
"It (Accenture's new technology) is a significant development but it is also not a development that is going to be visible at the front-end of things," said Martha Bennett, a principle analyst working with chief information officers for research house Forrester. "It is one of those absolutely essential pieces in the puzzle that makes an end-to-end blockchain deployment actually work."
Deployment of the nascent technology by financial institutions has been in part slowed down by concerns over security.
Information on a blockchain can only be accessed and edited by users that possess cryptographic keys, which have traditionally been stored in "cyberwallets." As these have been previously hacked and their contents stolen, "cyberwallets" are deemed not sufficiently secure by financial institutions, which are used to storing their digital keys in HSMs, Accenture said.
Coding blockchain applications to work with HSMs has proven complex and time-consuming. Accenture's platform makes it possible for banks to store digital keys automatically for their blockchain applications in HSMs.
It currently works with HSMs from security company Thales and blockchain applications using code developed by the Linux Foundation-led Hyperledger group. But the company plans to extend use to all types of blockchain protocols and HSMs.
Accenture's technology comes as more financial institutions seek to take some of the blockchain prototypes they have tested over the past year into the real world.
At the same time, some have expressed concern that blockchain's potential may be over-hyped and that it will take several years before the technology will yield benefits for large companies.
Reporting by Anna Irrera