Entity Identification Challenges in Financial Services – New Research by GLEIF
Collaborative research between GLEIF and the research agency Loudhouse has identified a number of key challenges with legal entity identification in the financial sector. The research surveyed over 100 senior salespeople in the banking sectors of the UK, US and Germany. One of the key findings was that almost six in ten (57%) respondents spend more than 1.5 days of their week onboarding new client organisations. Moreover, 50% of the financial institutions surveyed used on average 4 identifiers to help identify client organisations, a process that could take up to 6 weeks. This length of time spent onboarding creates a significant burden as salespeople then have less time to work on their core foci, such as acquiring new business and servicing existing clients.
Other key findings included:
- 57% of respondents agree that reliability of reference data is a challenge
- 55% of respondents agree that the resourcing of onboarding is a challenge
- 55% of respondents agree that lengthy processes mean a risk of business loss
- 61% of respondents believe that digital technology may further complicate the process
This last figure may be unexpected to many of you as we continue to see technology as the route to simplified processing. However, GLEIF is convinced that efficiency burdens can be mitigated significantly by adopting an LEI for each client organisation. This is particularly the case for banks that operate in multiple jurisdictions, whereby a global standard is increasingly becoming a necessity. The LEI offers businesses a one-stop approach to identifying legal entities, which can, in turn, heighten capacity to take the complexity out of business transactions. We agree – streamlining identity across national boundaries is one of (unfortunately) many issues that can help reduce the costs associated with compliance and reporting, through digitally consistent definitions across jurisdictions.
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