From the financial crisis to the digital future: Why the Legal Entity Identifier (LEI) is becoming indispensable

2 ágúst 2022

In this article, we examine the recent rebranding of the Global Legal Entity Identifier Foundation (GLEIF) and the crucial role that the Legal Entity Identifier (LEI) will play in the future of corporate identity.

The importance of the LEI in the digital global economy

The need for secure and verifiable digital identities is growing as digitalisation accelerates. LEI numbers offer a global, standardised solution for companies to verify their identity securely and reliably. This is crucial as cybercrime and other threats in the digital space continue to increase. Cybersecurity Ventures estimates that the global damage caused by cybercrime could reach USD 10.5 trillion by 2025.

The LEI (Legal Entity Identifier) plays a central role in strengthening trust in digital business processes and enabling companies worldwide to verify their identities reliably.

The economic recovery and the role of LEI numbers

As the global economy recovers from the pandemic and global GDP increases, driven by the introduction of new digital technologies, the need for a standardised corporate identity is becoming increasingly apparent. The Centre for Economics and Business Research predicted that the global economy could reach the $100 trillion mark as early as 2022.

In this new era of global connectivity and digital transformation, the Legal Entity Identifier (LEI) is crucial for providing organisations with a secure and verifiable identity regardless of geographical boundaries.

GLEIF’s vision and new strategic direction

To further spread the benefits of the LEI, GLEIF has embarked on a new strategic direction: the voluntary use of the Legal Entity Identifier (LEI) is to be promoted. This enables a broader use of the LEI number beyond legally prescribed use cases. This initiative aims further to strengthen global transparency and trust in corporate identities.

GLEIF is modernising its brand identity to support this vision. A new logo and a fresh tagline reflect the organisation’s increasing importance in the digital and real business world.

The origin of the Legal Entity Identifier

The Legal Entity Identifier (LEI) was created in response to the 2008 financial crisis when regulators worldwide recognised the need for greater transparency in the financial markets. The introduction of the LEI system was supported by the G20 and the Financial Stability Board (FSB) and has since helped over two million companies worldwide to obtain a unique identity.

Today, more than 200 financial regulators worldwide require the LEI number. It plays a crucial role in the fight against money laundering, terrorist financing, and other forms of financial crime.

The future of the LEI: beyond the financial sector

GLEIF promotes the voluntary adoption of the Legal Entity Identifier across all industries to facilitate global trade and increase trust in cross-border partnerships. The LEI provides a simple, numeric method of identifying legal entities and reduces the complexity of due diligence.

Conclusion: The LEI as the key to digital corporate identity

With the increasing digitalisation of the economy, the Legal Entity Identifier (LEI) is becoming an indispensable tool for the secure and verifiable identification of companies. GLEIF is doing everything it can to promote the global use of LEI and help companies worldwide move securely in the digital world.