A Spotlight on LEI Acceptance and Advocacy: The Growing Momentum for ‘One Global Identity for Business’ Borne from Strong Regulatory Roots
March 26, 2021
Clare Rowley, Head of Business Operations at the Global Legal Entity Identifier Foundation (GLEIF)
The origin of the LEI is firmly rooted in financial services and regulation, yet its future undeniably points to universal applicability across public and private sectors, with relevance to organizations large and small. This potential was recognized at the nascence of the LEI by its chief endorsers, the G20 and the Financial Stability Board (FSB). While the LEI’s initial purpose was to provide unique identification of legal entities participating in financial transactions across the globe, the G20 and the FSB were clear from the start that the LEI should become a broad public good and that it holds vast opportunity for the private sector.
Happily, the success of the LEI in context of its initial purpose has stimulated enthusiastic attention for the potential it offers outside of financial services regulation. With 1.82 million LEIs issued to date, 116 regulations and laws globally mandating LEI usage across financial services reporting, supervision and identification use cases worldwide, and a well-established and optimally functioning global LEI issuance and management infrastructure, there is a very convincing and reliable case for its use to be explored and championed in other areas.
Consequently, in recent years there has been advancing acceptance and advocacy of the LEI’s value as a unique universal identifier among regulators, governments, public authorities and private sectors worldwide. Alongside increasing legislation that mandates the LEI as an identifier for participants in certain financial transactions, there is a growing appetite among leading industry influencers for LEI usage to be extended across existing and new markets and applications. All of this signals that we are on the verge of exciting and transformational developments as we look to the years ahead.
Yet with so many – as yet unidentified and untested – ways in which the LEI’s capabilities can be harnessed, there are many current and potential LEI stakeholders who are unaware or unclear of its potential to deliver unique trust benefits to identity management scenarios and ecosystems globally. GLEIF recognizes that the universal relevance of the LEI means that its future potential far exceeds its current application. Quite simply, all use cases have not yet been envisioned, least of all demonstrated, because its use cases are potentially limitless. This is especially true as society moves towards digitalization, and digital identity management systems are increasingly required to establish trust and transparency in online exchanges. The LEI is perfectly poised to support this challenge.
For this reason, GLEIF is launching this ‘LEI Lightbulb Series’. Its aim is to bring clarity, knowledge and understanding of how the LEI is being used and championed, both inside and outside of regulatory realms and who its advocates are, in order to create a ‘complete picture’ of the LEI’s progress. We hope that by sharing news of high-profile support and implementation by regulators and public and private sector influencers across a myriad of sectors, applications and geographies, we may help readers arrive at their own ‘light bulb’ moment regarding the increasing relevance and universal application of the LEI in use cases and industries beyond those circles where it is already well established.
While educating on the powerful impact the LEI has already had on industry transformation and digitalization through regulatory mandates, and where its value has been recognized through endorsements by credible authorities, this blog series will also aim to outline the business case for consideration of further LEI usage and potential regulation, in industries and for use cases where it could make an immediate and positive impact.
By demonstrating how success derived from strong regulatory roots is giving rise to a ground swell of champions for further LEI regulation and voluntary LEI adoption across new and emerging applications, GLEIF hopes to educate on both the current and future potential value that ‘one global identity’ can deliver for businesses, regardless of sector, world-wide.
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