The banking sector relies on counterparty identification and verification for client lifecycle management in many use cases. The subscription fees for the KYC data and the connection and management of various data points lead to high costs, with the global banking sector spending around $40 billion on client onboarding annually.
Use of Legal Entity Identifiers in KYC and onboarding has the potential to be a significant cost saving tool, with measurable impact to people/staff productivity, the streamlining of processes, and improved transparency into available entity data.
Ubisecure is a GLEIF accredited LEI issuer and offers a pilot program for banking institutions to use LEIs in their KYC and onboarding scenarios. The service includes live lookups to the global LEI database with on-demand LEI issuance and SaaS-based lifecycle management of issued LEIs, to scale to banking customer quantities. The pilot is a tri-party engagement with Ubisecure, the Global LEI Foundation (GLEIF) as an independent and agnostic party, and the bank itself equally invested in realising the benefits of LEI usage.
This pilot outline provides a brief background on the potential benefits of LEIs to banks, highlights the datapoints from the McKinsey survey, and details how a bank may engage in the LEI pilot programme.
A Legal Entity Identifier is a 20-character identifier that identifies a distinct legal entity. It is defined by the ISO 17442 standard, endorsed by the G20, and acts as “the one identity behind every business”. As of September 2019, over 1.5 million legal entities worldwide have registered LEIs.
LEIs provide a publicly-available verifiable source of ‘who is who’ (organisation identity) and ‘who owns whom’ (organisation group structures). The system is operated by the GLEIF and the ability to issue LEIs is awarded to a limited number of organisations (like Ubisecure through its RapidLEI service) - passing a stringent accreditation process to become LEI issuers.
If banks extend the utilisation of LEIs beyond regulatory reporting in capital markets to other banking business lines, such as trade financing, corporate banking and payments, the resulting efficiencies in improvements in customer lifecycle management would generate significant cost and time savings.
Today, the global banking sector spends around $40 billion on client onboarding annually. That’s an estimated $54 million per bank, of which approximately $31 million is ‘people’ cost. Such costs include increase in human resources to: link identity data points; assess ownership structure detail; identify officers; and communicate back-and-forth with customers. Productivity improvements for these activities gained through LEI usage could generate cross-sector cost reductions of between 5-10% annually.
By using LEIs to streamline processes for connecting with internal and external data sources, banks could realise an estimated 14% reduction in client onboarding time.ǻGains from reducing duplicative data entries and improving data access across internal systems.ǻGains from reducing manual data lookups and enabling straight-through processing across external data sources.
To realise the positive impact of the LEI, banks must be able to easily manage the lifecycle and be assured of optimum quality of the identity data encapsulated within the LEI. To achieve this at scale with tens to hundreds of thousands of customers, automation is key. The bank must use a solution that connects directly to the various business registries, offers same-session issuance, and offers robust management tools and reporting that can be directly integrated into existing KYC services.
Ubisecure delivers the pilot through its RapidLEI service. Throughout 2019, RapidLEI has consistently been the fastest-growing LEI Issuer, as well as the most popular service with incoming transfers of existing LEIs. The service has been designed from the ground up to be fully automated for enterprises managing LEIs at scale. The RapidLEI service offers banks:
Ubisecure is a pioneering b2b and b2c Customer Identity & Access Management (CIAM) software provider and cloud identity services enabler dedicated to helping its customers realise the true potential of digital business.Ubisecure provides a powerful Identity Platform to connect customer digital identities with customer-facing SaaS and enterprise applications in the cloud and on-premise. The platform consists of productised CIAM middleware and API tooling to help connect and enrich strong identity profiles; manage identity usage, authorisation and progressive authentication policies; secure and consolidate identity, privacy and consent data; and streamline identity based workflows and decision delegations. Uniquely, Ubisecure’s Identity Platform connects digital services and Identity Providers, such as social networks, mobile networks, banks and governments, to allow Service Providers to use rich, verified identities to create frictionless login, registration and customer engagement while improving privacy and consent around personal data sharing to meet requirements such as GDPR and PSD2.Ubisecure is accredited by the Global Legal Entity Identifier Foundation (GLEIF) to issue Legal Entity Identifiers (LEI) under its RapidLEI brand, a cloud-based service that automates the LEI lifecycle to deliver LEIs quickly and easily.
Dreams Merchant has strategic relationship with RapidLEI and the GLEIF. We are Official Registration Agent. Dreams Merchant engaged in the fields of Legal, Technical and Financial activities under a single edge and having a robust foundation of Clientele base of Governments, Local Bodies, Corporate, Banks, Financial Institutions, Institutions, Trusts, Societies, Funds, Startups, Individuals, Celebrities, etc.
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