If you are a part of the business world or intend to be so, then it is likely that digital identity authentication will become more critical. First, however, core systems must trust each other to work efficiently and effectively without compromising security. The LEI code provides the root of trust that all systems use to communicate effectively.
Businesses that are still considering their options should ensure they are prepared for the future by getting hold of at least one LEI code for each unique part of their business identity which they want to put into use. This will prevent wasted time and effort come implementation day.
Having a digital identity system that can be trusted to work in unison with core business systems is vital for businesses of all sizes. The Simple LEI code registration and renewal provides the means to securely verify the authenticity of one’s digital identity and communicate it with other core systems. In addition, it is fast, efficient, convenient, and, most importantly, tamper-proof.
The LEI code brings several benefits in developing a digital identity system for businesses and individuals:
One Code To Rule Them All
Today’s complex financial reporting requirements often require companies to have different identifiers in different countries. An LEI code simplifies this requirement by providing a single, global identifier for all legal entities (companies) worldwide.
Transactions today rely on the parties’ trust in each other and reliance on intermediaries to establish trust. But, if transactions can be conducted over the Internet, what’s needed is a way to codify the trust between parties without having to rely on third parties or paper documents. An LEI code provides this transparency for all stakeholders by reducing information asymmetry and increasing the speed of transactions.
Transaction Transparency and Traceability
An LEI code embeds transaction information directly into the transaction by providing a tamper-resistant secure record of all transactions associated with each unique entity. The only way to change transactions is to have one party in control of the private key. This fact brings transparency, security, and public trust to all online transactions. There is no way to hide a transaction.
A Public Trust Record
Today’s complex financial reporting requirements often require companies to have different identifiers in different countries. An LEI code provides a universal identifier for financial institutions, governments, and other parties to conduct online transactions without having the parties needing to know each other’s legal identity…The increased trust can lower transaction costs and help speed up transactions, resulting in more liquidity.
Digital ID For Everyone
The LEI code is a digital identifier that can confirm identities for everyone, from individuals buying goods or services online to lawyers and doctors doing business with each other. The Global LEI Foundation has adopted a policy requiring that the legal identities of all members be verified before entering into its membership agreement. Verification will require them to provide information from trusted, authoritative sources that can confirm their identity.
Using the LEI Code at Certain Domestic Banks and Securities Broker/Dealers
The LEI code would simplify compliance with Know Your Customer (KYC) rules by reducing the data collection requirements on banks and broker-dealers when opening new accounts for existing customers. In effect, the LEI code provides similar functionality as the Social Security Number in the United States because it allows for customer identification without collecting sensitive personal data.
Complementing Account Numbers and Existing Identification Documents
Today, legal entities have account numbers or other identifying information to identify themselves with financial institutions. The LEI code will complement these existing identification methods and help reduce fraud because every code component is verified by trusted public information.