From Crisis Response to Public Good: The LEI as a Trust Layer for the Global Digital Economy

By Alexandre Kech - CEO - Global Legal Entity Identifier Foundation (GLEIF)

The 2008 global financial crisis exposed a critical weakness in financial market infrastructures: the inability to clearly and consistently identify the legal entities behind complex transactions. When major institutions faltered, regulators struggled to determine who was exposed to whom, amplifying uncertainty and systemic risk. In response, the Legal Entity Identifier (LEI) was established as a global public good to enhance transparency and strengthen market integrity.

Designed through international regulatory coordination and governed in the public interest, the Global LEI System (GLEIS) introduced a standardized way to identify legal entities participating in financial transactions worldwide. To date, the GLEIS remains the only regulatory-mandated identity management system for legal entities at a global scale.

As the global economy becomes increasingly digital, the LEI is gaining adoption in areas such as digital trade and cross-border payments. Now also recognized as a Digital Public Good by the Digital Public Goods Alliance, the LEI enables more trustworthy and transparent digital transactions, thereby providing an interoperable trust layer for the global digital economy.

Enabling Global Data Interconnectedness and Interoperability

From the outset, the LEI was conceived as ‘a linchpin for financial data’ to enable regulators, supervisors, and risk managers to identify transaction counterparties unambiguously. Each LEI links to verified reference data—including an entity’s official name, registered address, and ownership structure—allowing exposures to be aggregated consistently across jurisdictions.

Since 2018, GLEIF’s Certified Mapping Services have further enhanced the LEI’s value by enabling data vendors and other organizations to map proprietary or local identifiers to the LEI. By connecting previously fragmented identification systems, mapping improves data consistency and interoperability across the global financial ecosystem. Mapping partners include SWIFT, the Association of National Numbering Agencies (ANNA), S&P Global Market Intelligence, OpenCorporates, and, more recently, China’s Qichacha (QCC), among others.

To this day, the Global LEI System is unique, serving as the only regulatory-mandated identification management system for legal entities on a global scale. Designed to function as a global public good, the system follows a federated, three-tier architecture.

At the top level, the Regulatory Oversight Committee (ROC)—comprising public authorities and market regulators from over 50 jurisdictions—provides governance and oversight.

Through these collaborations, the LEI increasingly serves as a common reference point across capital markets, payments, securities issuance, and business information platforms.

In 2024, GLEIF also launched an initiative linking LEI records directly to local business registries. For entities registered with participating authoritative sources, a dedicated URL is embedded in the LEI record, providing direct access to official registration data at the respective registry. This strengthens counterparty due diligence by enabling verification directly at the authoritative source and enhances transparency in cross-border transactions.

Current cooperation partners include the Netherlands Chamber of Commerce (KVK), the UK’s Companies House, and the Swiss Federal Statistical Office (FSO). As participation expands, the LEI record increasingly serves as a gateway to trusted business information worldwide.

Optimizing the Toolkit Against Fraud: The LEI in Cross-Border Payments

Digitization and emerging technologies such as artificial intelligence (AI) are creating new risks and challenges for financial markets. As recently noted by the Financial Action Task Force (FATF) in its latest round of mutual evaluations, “fraud is cited in 89% of reports (156 countries), making it the second most common predicate offence after corruption.”

This reality is increasing compliance pressures, prompting international institutions and regulators to explore both new and existing tools to combat fraud more effectively. Given its success in capital market supervision, the LEI is increasingly being recognized as a foundational trust component in cross-border payments, supporting the G20 roadmap for faster, cheaper, more inclusive, and more transparent payments.

Organizations such as the Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements (BIS), and the Wolfsberg Group have highlighted the benefits of embedding the LEI in payment flows: enhanced transparency and trust, improved compliance processes, reduced false positives in sanctions screening, and improved straight-through processing (STP).

These benefits are further amplified by the global adoption of ISO 20022, which introduces richer and more structured payment data. By providing standardized and globally recognized legal entity identification, the LEI enhances the usability of this data and contributes to the fight against financial crime, including anti-money laundering (AML) and countering the financing of terrorism (CFT), as reflected in the inclusion of the LEI in FATF Recommendation 16 on Payment Transparency.

Beyond cross-border payments, the use of the LEI also benefits a broader range of digital financial services. As recently highlighted by the Cambridge Centre for Alternative Finance

(CCAF), the LEI can “provide robust mechanisms for managing counterparty risk, ensuring compliance with KYC/AML requirements, and enhancing transparency among primary dealers, financial intermediaries, and retail participants.”

Building on this foundation, the verifiable LEI (vLEI), the digitally trustworthy counterpart of the LEI, enables the automated verification of organizations as well as the individuals authorized to act on their behalf. By embedding verifiable organizational identity into digital interactions, the vLEI unlocks new efficiencies across digital financial services and beyond.

As markets become increasingly interconnected and data-driven, trusted organizational identity is no longer optional - it is foundational. GLEIF will continue to evolve the Global LEI System to empower regulators and market participants worldwide, reinforcing its role as a global public good and ensuring it remains a future-proof trust layer for modern, interoperable financial market infrastructures.