LEIs are quickly being adopted by jurisdictions around the world. The unique 20-digit codes are now mandatory for many companies operating within Europe, North America, Australia, and Asia. While registering for an LEI may be compulsory for your company, the widespread adoption of LEIs comes with a host of benefits for financial services businesses.
The Global LEI Foundation (GLEIF) report ‘A New Future for Legal Entity Identification’ outlines the issues banks face when onboarding new businesses. More than half of the bank staff who provided data for the report stated that it’s challenging and time consuming to find reliable and verifiable data about their potential clients. When you consider that many major firms have 1,000 or more full-time staff working on onboarding clients and then keeping their information up-to-date, it’s easy to see how significant the time investment is. The global LEI database can substantially decrease the administrative burden associated with client verification.
Improved client experience
The GLEIF’s whitepaper regarding onboarding processes suggests that 2 in 5 senior salespeople are concerned about losing potential customers during the onboarding process as a result of the length and complexity of the process, as well as the information that they’re required to share. LEIs are able to reduce the administrative burden on the part of the client, allowing you to quickly onboard them and get started with providing your services.
Reduced risk and informed decision making
Broad adoption of LEIs results in a substantial reduction of risk related to financial transactions within the global marketplace. LEIs are the global standard for identification. Using information associated with a company’s LEI means that you will know who you’re transacting with and who owns them. Access to this information allows you to reliably measure risk and to make informed decisions.
LEIs can reduce onboarding costs by 10%, resulting in an overall reduction of 3.5% in capital market operations costs for the global investment banking industry alone. In monetary terms, that amounts to savings of $150 million. However, that figure only represents part of the potential wider savings. The reduction in time spent by your company’s employees on verifying and updating data will result in further savings, not to mention the reduction in costs associated with finding reliable data. Access to the LEI database containing a company’s up-to-date information is (and will remain) free of charge.
Be the solution
The financial services industry is changing. By registering for an LEI, you’re making a commitment to promoting transparency within the global marketplace and to creating a better future for all market participants.