The LEI: A cornerstone for a transparent and efficient global trade ecosystem

18 lokakuun 2022

In an increasingly globalised world, creating an inclusive and efficient trading ecosystem is of central importance. A critical factor in achieving this goal is the introduction of universal identifiers such as the Legal Entity Identifier (LEI). Enno-Burghard Weitzel, Senior Vice President for Strategy, Digitalisation, and Business Development at Surecomp, explains how the LEI improves operational efficiency in trade finance transactions while promoting inclusive trade growth.

The importance of the LEI in trade finance

The Legal Entity Identifier (LEI) is a unique code that identifies companies worldwide and thus forms the basis for transparent and trustworthy trade relationships. The LEI plays an increasingly important role, particularly in trade finance, where the number of fraudulent transactions has risen since the pandemic. Weitzel emphasises that access to verifiable identities is crucial for all trading participants to create trust and optimise the trading process.

The partnership between GLEIF and Surecomp, launched in early 2022, aims to integrate the Global LEI Index into Surecomp’s cloud-based trade finance solution. By using the LEI, trade financiers can quickly and efficiently verify the identity of their trade partners, speeding up the entire verification process and significantly increasing operational efficiency.

Increased efficiency through the Global LEI Index

Embedding the Global LEI Index in Surecomp’s RIVO platform, a centralised solution for trade finance transactions enables customers to verify trading participants’ identities in real time. This leads to more trust and transparency in trading relationships. A significant advantage of this integration is that the verification process is faster and less prone to errors. By automatically filling in the data fields after entering the LEI, the need for manual data entry is eliminated, minimising human error.

Weitzel explains that by integrating LEI data into its platform, Surecomp can standardise the identity verification process. This helps to improve compliance with Know Your Customer (KYC), anti-fraud and anti-money laundering (AML) regulations. The partnership with GLEIF ensures that Surecomp’s customers have access to a trusted and efficient verification system that significantly reduces risk in the trade finance process.

Benefits for Surecomp customers through LEI integration

Surecomp customers benefit significantly from integrating the LEI into the RIVO platform. The improved transparency and higher level of trust achieved through using the LEI leads to more efficient and faster identity verification in trading transactions. This enables more effective risk mitigation and facilitates adherence to compliance regulations.

Integrating the LEI into Surecomp’s trade finance ecosystem also provides customers with seamlessly connected complementary solutions. By utilising the LEI, clients can access services such as ESG compliance, fraud prevention, and AML checks. This holistic approach to trade finance supports operational efficiency and promotes sustainable trade growth.

Prospects: The impact of the LEI on global trade networks

The introduction of initiatives such as the LEI could significantly impact the future of global trading networks. Universal identifiers allow financial institutions and corporations to reduce the time spent on KYC checks while increasing operational efficiency. This is particularly important to close the trade finance gap that affects many small and medium-sized enterprises (SMEs).

By simplifying the verification of SMEs, banks and other financial institutions can more easily take on these businesses as clients, fuelling trade growth and supporting inclusive trade. Therefore, the use of the LEI helps create a safer trading environment and promotes the integration of SMEs into the global trading network.

Weitzel emphasises that the partnership between Surecomp and GLEIF is crucial in supporting sustainable trade growth. The combination of technical innovation and universal identifiers such as the LEI makes creating an inclusive trade ecosystem based on trust, efficiency and transparency possible.

The LEI is the basis for an inclusive trading ecosystem

The Legal Entity Identifier (LEI) is central to creating an inclusive and efficient global trading ecosystem. The partnership between Surecomp and GLEIF demonstrates how universal identifiers can help increase operational efficiency, minimise risk and drive trade growth. The future of global trade increasingly depends on initiatives prioritising trust and transparency while supporting SME integration.

Corporate financiers worldwide can benefit from a safer, more efficient, and inclusive trade ecosystem by further adopting the LEI and integrating it with trade finance solutions such as RIVO.