Countries all across the world have adopted LEIs as a means of identification. Many businesses based in Europe, North America, Australia, and Asia now require the use of specific 20-digit codes, which are now mandated by law. In spite of the fact that obtaining an LEI may be mandatory for your organisation, the broad adoption of leiservice.com has a number of advantages for global financial businesses. Here’s why LEI is important for businesses.
Increasing the effectiveness of operations
‘A New Future for Legal Entity Identification,’ a report published by the Global LEI Foundation (GLEIF), describes the challenges that banks have while taking on new enterprises. According to the survey, more than half of the bank employees who contributed information for the report claimed that finding credible and verifiable information about their prospective clients is difficult and time-consuming. When you realise that many major organisations have 1,000 or more full-time employees who are responsible for recruiting clients and maintaining their records up to date, it becomes clear just how critical the time commitment is in this process. The worldwide LEI database has the potential to reduce the regulatory burden associated with customer identification by a considerable amount.
Increased satisfaction of the clients
An onboarding whitepaper published by GLEIF claims that 2 out of 5 senior salespeople are worried about losing potential consumers during the process because of how long and difficult it is, as well as what information they must divulge. As a result, LEIs enable you to get up and running quickly with your clients, reducing the regulatory burden on them.
Risk reduction and better-informed decision-making
The widespread use of LEIs leads to a significant decrease in the risk associated with financial dealings in the global market. LEIs are the universally recognised norm for identification. You will know who you are dealing with and who owns a firm if you use information related to the LEI of that company. You can make effective choices if you have access to this information, which allows you to accurately estimate risk.
LEIs have the potential to lower recruiting costs by 10%, leading to an overall reduction of 3.5 percent in financial market operations expenses for the international investment banking business alone, according to the World Bank. In financial terms, this equates to a savings of almost $150 million. However, that number only reflects a portion of the total amount of savings that may be achieved. The decrease in the amount of time spent by your company’s personnel on data verification and maintenance will result in additional savings, not to mention the decrease in the costs involved with obtaining correct data. Access to the LEI database, which contains the most up-to-date information about a company, is (and will continue to be) completely free.
Take the initiative and be the answer.
The financial services industry is undergoing transformation. The LEI signifies a dedication to enhancing openness in the international market and to ensuring a better environment for all market players by submitting an application.