Banks around the world are starting to mandate that their corporate borrowers obtain a Legal Entity Identifier (LEI), sometimes referred to as a Global Legal Entity Identifier (GLEI), to improve their risk management and better understand their clients’ risk exposure. An October 2017 report by McKinsey and the Global Legal Entity Identifier Foundation (GLEIF) declares that on an annual basis, “banks could potentially collectively save between $250 million to $500 million per annum if LEIs were used to identify international entities and to automate the tracing of their history for the issuance of letters of credit.”
Without doubt, the requirement of having an LEI is growing, providing more transparency to lenders and financial markets participants and, and potentially reducing KYC compliance operating costs. This video explains what it is and why it’s important.