Why your company should use the Legal Entity Identifier now

2 prosince 2024

In today’s globalised financial world, transparency and efficiency are at the heart of cross-border payments. The Legal Entity Identifier (LEI), also known as the LEI number, has established itself as an indispensable tool to improve the security and traceability of international financial transactions. But how exactly does the LEI optimise these processes, and why should companies act now?

What is a Legal Entity Identifier (LEI)?

A Legal Entity Identifier (LEI) is a unique global identifier assigned to companies and organisations involved in financial transactions. This 20-digit alphanumeric number clearly identifies legal entities and facilitates transaction traceability. Especially in international contexts, the LEI number is considered to play a crucial role in avoiding risks and improving data accuracy.

How does the LEI number improve the transparency of international payments?

Integrating the LEI in payment messages makes it possible to identify the originator and recipient of a transaction in real-time. This not only speeds up the transfer of funds but also significantly reduces the risk of errors and fraud. With the advent of instant payments and the further development of the global market infrastructure, the use of the LEI number is becoming increasingly indispensable.

The support of the Financial Stability Board (FSB)

The Financial Stability Board (FSB), supported by the G20, has recognised the LEI as an essential building block for optimising cross-border payments. Through cooperation with the Global Legal Entity Identifier Foundation (GLEIF), work is underway to integrate the LEI code into international standards such as ISO 20022. This standardisation improves interoperability between different payment systems and ensures precise and uniform data transmission.

Why the LEI is essential for your business

In an era of fast, global transactions, it’s critical for businesses to build trust in international payments. The LEI number helps you to:

Minimise risks:

Fraud is prevented by automatically verifying the parties involved.

Increase efficiency:

Automated processes save time and costs.

Ensure compliance:

Regulatory requirements are met effortlessly.

Conclusion: act now

Introducing and integrating the Legal Entity Identifier (LEI) into international standards is essential to modernising the global financial system. Companies that adopt the LEI code at an early stage secure a competitive advantage and actively contribute to the security and efficiency of international payment transactions.

Start registering your LEI number now and benefit from the advantages of optimised payment transactions. Visit our website and find out more – for a more secure and efficient future.