Distributed Ledger Technology in the Banking Sector: A Method for the Evaluation of Use Cases

Abstract

Distributed ledger technology (DLT) is seen as an opportunity for the banking sector with high potential to achieve complexity reduction, cost savings, and further benefits in diverse processes. These high expectations and a limited technology know-how lead to bank internal challenges during the selection of suitable use cases for DLT. We apply Design Science Research (DSR) to address this challenge by developing a method for evaluating the business needs and the feasibility of deploying DLT in a certain use case in the banking sector. Devised using the letter of credit (LC) process as reference, our results suggest that various requirements and beside bank internal also external parties should be included in the evaluation. This implicates, that a more detailed study is needed on including external stakeholders in use case evaluation. Our method can be customized and applied as a structured evaluation approach in the banking sector.