According to a recent study by McKinsey & Company, Covid-19 has accelerated companies’ digital initiatives by an average of seven years.
Over the past year, GLEIF has launched several strategic initiatives in response to the acceleration in business. These incentives are designed to increase the value of LEIs in the digital identity space.
On 18 June, Germany celebrated Digitalisation Day, which prompted us to look back at the milestones achieved and discuss the opportunities the future holds for LEIs and the global digital economy.
The Validation Agent: Opening the door to business ID services for legal entities
GLEIF introduced a new role to the global LEI system in September, that of Validation Agent. The role is designed to help organisations and financial institutions make immediate gains in customer lifecycle management and start developing innovative business identities for their customers.
Validation agents use their KYC (know-your-customer), AML (anti-money laundering) and other regulated onboarding (business-as-usual) processes to obtain LEIs for their clients. By providing LEIs to their business customer base, validation agents can promote financial inclusion and create new value by generating revenue through digital business identity management services and cross-border supply chain relationships.
LEIs can also be used by the validation agents to accelerate their digital transformation, in areas such as customer onboarding, contract signing, payments and other transactions.
The Validation Agent framework has gained significant traction globally since its launch in late 2020. Two major institutions, J.P. Morgan and the China Financial Certification Authority (CFCA), have already completed the qualification process and many more will follow.
The vLEI: Enabling instant, automated verification of business identity
Until now, there was no independent authority capable of establishing a universal digital trust between legal entities, which was an industry-wide barrier to innovation. To overcome this barrier, GLEIF has launched a cross-industry development programme in 2020 to create a fully digitised verifiable LEI (vLEI). Once finalised, the vLEI will extend the global LEI system to create a fully digitised LEI service that will enable automatic and instant identity verification between global counterparties.
GLEIF acts as the “root of trust”, the vLEI service creates a cryptographically secure chain of trust which in turn replaces the need for manual processes to confirm an organisation’s LEI data. This will enable organisations worldwide to use their LEI’s non-repudiable identification data regarding their legal status, ownership structure and authorised representatives in a variety of activities, many of which are automated, allowing them to participate in the global digital economy for years to come.
With this it has enabled the vLEI to have the potential to become one of the most valuable digital credentials in the world.