 Trusted and open corporate data: Why adoption of the LEI/vLEI is key to enhancing risk management practices in the face of rapid digital transformationStephan Wolf
Journal of Risk Management in Financial Institutions, 2023, vol. 17, issue 1, 13-21 Abstract: As financial institutions increase their participation in the global digital economy, huge opportunities emerge: more efficient and accurate ways to fight fraud and crime through automated processes and real-time industry collaboration and action; the disinhibition of capital flows needed to fuel economic development; the growth of broader and trusted cross-border customer bases, partner networks and supply chains; and, as will be explored more fully through the presentation of a use case, the capability to advance environment stewardship. These are just some of many possibilities, yet new threats materialise as companies digitise and digitalise. Many are connected to the challenge of identity management and verifying the authenticity and integrity of associated entity reference data in digital environments. How do organisations verify the legitimacy of who they are interacting with online? Can they trust the origin and integrity of digital data associated with customers, partners and other stakeholders, and that the data they do have is current and accurate? Here, the Legal Entity Identifier (LEI) together with its digitally verifiable counterpart, the vLEI, can play a crucial enabling role. This paper examines the opportunities and risks that financial institutions face as they embark on digital transformation programmes. It explores the importance of high quality, verified and open legal entity data to enhanced risk management practices. An outline is given of how a universal ISO entity identification standard, the LEI and its digital counterpart, the vLEI, can be used to: verify the identity of companies, their corporate organisational structures and their authorised executives; and to connect an organisation to verified business data, other identifiers, company reports and multiple data sources. A risk management use case will be presented –— the use of the LEI as an environmental, social and governance data connector — to show how the LEI and vLEI can be harnessed by financial institutions to inform better business decision making and create enhanced, even automated, risk management practices within increasingly digital corporate ecosystems. Keywords: digital identity; identity management; open data; digital transformation; ESG reporting (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2023:v:17:i:1:p:13-21 Access Statistics for this article More articles in Journal of Risk Management in Financial Institutions from Henry Stewart Publications |
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