Client onboarding and lifecycle management are an ongoing problem at many financial institutions, with inefficiencies often caused by layers of technologies and processes added to capture required data and avoid fines when new rules and regulations are introduced. A solution to the problem, which could save the global banking industry billions of dollars a year according to McKinsey & Co, has recently been proposed by the Global LEI Foundation (GLEIF).
The GLEIF solution proposes that financial institutions become Validation Agents and obtain LEIs on behalf of their clients. This should enhance the onboarding process, streamline internal operations and open the door to new cross-border client identity services.
Peter Warms, business development manager at GLEIF, acknowledges that chasing perfection using current onboarding practices is extremely difficult. He says: “Good entity identifiers are needed from the get-go. If your counterparties have an LEI, you have a fingerprint of who they are and where they are, and can drive an initial risk assessment that can be reviewed as necessary.
“The LEI is critical to uniquely identifying companies. It is an ISO standard and part of a trusted system that authenticates entities, improves data management for initial client onboarding, and can be used to refresh risk profiles and manage the client lifecycle. As part of an entity management system, use of the LEI can be extended to support a variety of other solutions.”
If your organisation is running a race with no finishing line when it comes to client onboarding and lifecycle management, join A-Team Group’s January webinar on entity identification to find out more about the GLEIF approach and the benefits it can deliver. Peter Warms will be in conversation with other experts including Isabelle Ornella Pete, head of KYC regulatory data at Société Générale, and Peter Serenita, chief data officer at Scotiabank.