The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight White Papers

Business Entity Identifiers – The Crucial Foundation for Accurate Risk Management

As the financial world continues to grapple with the fallout of the credit crisis, one thing is clear: managing risk is now paramount to the surviving financial institutions. But you can’t manage what you don’t know.

Many financial institutions have been caught in the current environment through a lack of awareness of their true exposure to risky investments, and ultimately to those entities which defaulted, leading to record losses and write-downs across the industry.

There is an immediate and pressing requirement from financial institutions for a usable global enumeration standard for business entity identifiers. Getting risk management houses in order is a clear driver, but this also comes against the backdrop of the anticipated onslaught of new regulations that financial institutions will have to contend with, along with the ongoing need to improve operational efficiencies, reduce errors, and reduce costs.

So while industry bodies continue the lengthy process of agreeing on a standard format to bring to market, is there an immediate step that financial institutions can take to fill this void? We believe there is, and it is a step that a number of fund managers and investment banks are already piloting.