Organizational Identity: Making Trust the Cornerstone of International Trade and Business Transactions on a Global Scale

In the turbulent aftermath of the financial crisis, when trust in financial institutions was shattered, GLEIF emerged as the guardian of a system designed to regulate an unparalleled identifier (LEI), ensuring accurate and reliable identification of parties involved in transactions. As GLEIF celebrates its tenth anniversary, outgoing CEO, Stephan Wolf, reflects on the journey towards one global identity behind every business and the transformative opportunities that lie ahead.

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Cast your mind back to 2008 and the unprecedented turbulence precipitated by the collapse of Lehman Brothers.

The world faced an intractable global financial crisis. Trust in financial institutions had been shattered. Uncertainty paralyzed markets. And two fundamental questions remained: How did this happen? How can we prevent it from happening again?

Amid the tumult, the world's regulators recognized and acknowledged a key challenge. The inability to identify parties to transactions across markets, products, and regions was inhibiting the ability to understand and evaluate emerging, systemic risks.

This led them to embark on a mission to develop a universal means of identifying legal entities engaged in financial transactions—the Legal Entity Identifier (LEI). To support the implementation and adoption of the LEI, the G20 endorsed the Financial Stability Board (FSB) to establish the Global LEI Foundation (GLEIF) in 2014 as a not-for-profit organization to develop and maintain the Legal Entity Identifier (LEI) as a broad public good for the benefit of the users of the public and the private sector. GLEIF delivers high-quality and free-of-charge business card information about legal entities under open data terms of use.

From the beginning, the LEI initiative has served as a 'broad public good,' evident mostly in global financial markets where its use has been widely mandated. It has created much-needed transparency and promoted financial inclusion.

Global LEI System: the only regulatory-mandated ID management system for legal entities globally

Since its inception almost ten years ago, the Global LEI System has revolutionized how legal entities are identified and tracked globally - providing a robust framework for uniquely identifying legal entities participating in financial transactions. This has been made possible through the collaborative efforts of its founding body, the Financial Stability Board (FSB); the Regulatory Oversight Committee (ROC), which comprises representatives from public authorities worldwide to ensure effective governance; and the LEI issuing organizations which serve as the primary interface for legal entities wishing to obtain an LEI.

The strong regulatory support for the LEI within its historical playground of capital and money markets has given it unimpeachable credentials for enabling trust and transparency within complex identity management ecosystems. GLEIF’s focus on increasing the relevance and value of the LEI led to a rise in government, authority, and other influential organizations championing it. Notably, support was not only in favor of regulatory agendas but also of bringing benefits to private and public sector use cases outside of those traditionally mandated. The proliferation of new LEI applications being considered and consulted around the world demonstrates the universal applicability of one global identity behind every business. Advocacy is building for the LEI’s potential to help simplify complex and opaque supply chains and support the digitalization of global trade.

Ten years on, GLEIF has left an indelible mark on the financial ecosystem in pursuit of its singular vision: One global identity behind every business. We have contributed to a safer, more transparent economy that has undoubtedly transformed the marketplace for the better.

Building a safer, more transparent global economy

Of course, the LEI is at the heart of GLEIF. It is an ISO-standardized 20-digit alpha-numeric code connected to a verified business registration and information record in the Global LEI Index, a data bank maintained by GLEIF and made available to everyone, everywhere, free of charge.

No two LEIs are ever the same. One LEI represents one legal entity. This means that anyone, anywhere in the world, can cross-reference who an organization claims to be, together with its ownership structure and subsidiary relationships, against a legitimate and verified data source.

GLEIF's myriad achievements and milestones over the past ten years are best encapsulated by the 2.5 million legal entities around the world that now identify themselves internationally using an LEI. Global adoption continues to grow, enabled and bolstered by an expanding network of stakeholders across the Global LEI System, including Validation Agents, LEI issuers, and mapping partners. This is underpinned by GLEIF's absolute and ongoing commitment to optimizing data quality, reliability, and usability.

The result is unprecedented transparency into the identities and ownership structures of legal entities everywhere. This is translating into growing recognition across the public and private sectors of the LEI's unique capacity to bring increased trust and transparency to multiple applications, such as fighting financial crime, simplifying complex and opaque supply chains, and facilitating global trade.

Yet challenges remain. The digitalization of traditional business models and industries promises unparalleled opportunity for economic and social betterment, but it depends on organizations' ability to trust in the authenticity of their customers, partners, and suppliers—wherever they are in the world.

Unfortunately, confidence in digital authenticity remains in short supply. Recent technological advances—including the rapid proliferation of artificial intelligence (AI)—also present seismic new challenges. Establishing a universal and trusted way to digitally verify the legal identities of counterparty organizations and their key representatives is now critical to the health, stability, and viability of the global digital economy.

GLEIF has already assumed a leadership role in this regard. In 2022, it introduced the digitally trustworthy version of the LEI, the verifiable LEI (vLEI), to address the urgent global need for digitized, automated authentication and verification of organizations across a broad range of industries.

As GLEIF enters its second decade, the next phase of LEI adoption will be transformative. In the digital era, identifiability equals empowerment. Identifiability will bring us closer to a world where every transaction is a testament to trust, where organizations thrive in a safer environment, and where transparency is an expectation, not an exception.

Reflections on a decade of GLEIF

As I prepare to officially step back from my role as GLEIF CEO by the end of June, it has been a privilege to reflect on a decade of incredible experiences and achievements.

I am proud to have led GLEIF from its infancy to the thriving and successful organization it has become today. GLEIF's cause stands stronger than ever, and its teams remain fully committed to navigating the exciting opportunities ahead.

I offer my sincere gratitude to all of my GLEIF colleagues and stakeholders from across the Global LEI System who have helped make my tenure at the helm of GLEIF a successful and fulfilling one.

The future of the LEI and the vLEI holds great promise, and I am confident that GLEIF will thrive under the leadership that will guide us into the next chapter.

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