Implementing smart contracts in the syndicated loan market : an issue of adoption

Abstract

Distributed ledger technology, which found its fame through the cryptocurrency Bitcoin, allows for data to be recorded, shared and synchronised across multiple, distributed data stores. In accordance, this brought forth the idea of using this technology to build consensus. During the last few years distributed ledger technology has gained the much needed attraction it deserves, especially within the Syndicated Loan Market that is one of the major use case opportunities that have been identified. Implementing this technology within the Syndicated Loan Market through Smart Contracts allows for reduced manual labour and back-office workloads as well as the removal of reconciliation and corporate actions. As a result counterparty risk and settlement times will be minimised and performance and transparency for regular reporting will increase. Although the Syndicated Loan Market will benefit from Smart Contracts, it has been identified that an individual’s embrace of this new technology will determine its successful implementation. To address this issue, this dissertation examines the trust model, the trust in technology drivers and the revised UTAUT model to construct the Trust and Adoption of Technology Model. This qualitative study culminates in guidelines for the implementation of Smart Contracts that are supported by theory and a literature review. Avenues for future work include investigation of a multi-motive Information Systems acceptance model.