The introduction of the proposed Standard Legal Identifier (LEI) is a golden opportunity for many financial institutions to enhance and improve overall client data management and achieve the coveted cleansed legal entity data repository.
The ability to assign a single, unique identifier to each and every legal entity – that can be shared both within and between financial institutions – will enable the creation of a true, complete and accurate financial and risk-based picture of the client, its associated entities and all related beneficial relationships. Not only will this help risk management and monitoring, it also enables the bank to measure client profitability more accurately.
And while still very much up in the air regarding specifics around jurisdiction (centralised vs federalised), governance and implementation, one thing is for sure – banks that have the cleanest and most organised client data will spend far less time and money on implementation of LEI across their institution.
For the majority of financial institutions, the introduction of the LEI will require them to undertake an institution-wide data cleansing and remediation initiative. Once an LEI has been assigned to an entity, the bank must be able to map each existing entity to its newly assigned LEI. To do this, the bank needs to be able to identify all records of client data being held in multiple databases and departments across the institution.