On 4 February the EACT and the Global Legal Entity Identifier Foundation (GLEIF) hosted a roundtable with a number of senior corporate treasury representatives to discuss how the LEI and the global system it is embedded in can simplify, secure, and digitise processes across treasury departments.
The roundtable focused predominantly on use of the LEI in Know-Your-Customer (KYC) processes, in payments, and in invoicing. For all of these, the LEI system – as an open source database – provides opportunities for increasing the efficiency and security of the necessary processes, provided wider use of the LEI system were to be offered by financial counterparties or asked for by corporate end-users. For example issuance of an LEI could be incorporates as part of regular bank account opening procedures. This would result in an increase in LEIs issued and likely also drive down the cost of individual identifiers.
The LEI system incorporates regularly updated source data that is frequently requested by bank counterparties as part of KYC and customer due diligence (CDD) processes. This is information that relates to legal entity information, corporate structure, and data for authorised signatories. Therefore, encouraging use of the LEI for these processes would enable counterparties to directly access a golden source of information and ease ongoing compliance pressures felt by corporates of various sizes. This in turn would significantly contribute to reducing the potential for fraud or unauthorized use of bank accounts. Similarly, incorporating the LEI in payment messages and in e-invoicing procedures could help reduce the risk of fraud treasury department are confronted with as it would allow for verification of invoice issuers and payees, but also allow the matching of bank accounts against LEIs.
The roundtable participants agreed that there is significant untapped potential for wider use of the LEI system – also in cooperation with other industry led efforts such as those spearheaded by SWIFT like the SWIFT KYC Registry or SWIFT GPI. Participants agreed that there is a need for wider stakeholder participation and engagement to highlight possible benefits of the LEI system and encourage a wider uptake across the industry.
EACT will continue to remain engaged in this process and together with its members ensure that the views and suggestions of corporate treasurers – as one of the main stakeholder groups – are reflected in the ongoing discussions.
Tarek Tranberg, Head of Public Affairs & Policy, EACT
Cornelia Hesse, Officer and Board Member, EACT
A banking crisis, Basel IV, sanctions, and ESG: German treasurers have a number of weighty topics on their agenda this year.Read
Treasurers should not underestimate the expected impact of Basel IV regulation, warns Verband Deutscher Treasurer (VDT)Read
The 2023 EACT survey, which brought together 250 answers from group treasurers from European multinationals, attempts to detect treasury trends and priorities for multinational companies over the coming 12 to 24 months.Read
As technology develops, there has been a proportionate increase in online and technology-enabled fraud. Digitalization has allowed fraud to become “industrialized”.Read
In a context of rising interest rates, bankers are becoming (too) cautious. What can we hope or fear in such a delicate and uncertain climate are the questions we intend to answer.Read