As global markets increasingly operate in real time and continuously, financial institutions and corporates are facing growing pressure to modernize how they onboard and verify counterparties. Traditional Know Your Business (KYB) processes, which rely heavily on repeated document collection and fragmented data sources, have become a source of operational friction and cost. Industry observers note that these challenges are becoming more acute as regulatory expectations and transaction volumes rise.
In this context, the Global Legal Entity Identifier Foundation (GLEIF), the non-profit organization that operates the Legal Entity Identifier (LEI) system, has been working to position organizational identity as a shared digital infrastructure for global markets. Since Alexandre Kech assumed the role of Chief Executive Officer, GLEIF’s initiatives have increasingly focused on expanding the use of standardized identity data beyond regulatory reporting into broader onboarding and compliance workflows.
From Fragmented KYB Processes to a Shared Identity Framework
At the center of GLEIF’s work is the Legal Entity Identifier (LEI), an ISO-standardized identifier that uniquely identifies legal entities engaged in financial and commercial activities. The LEI system is governed by a federated, non-profit model and supported by a publicly accessible global dataset that includes reference information and ownership relationships.
Market participants have increasingly adopted the LEI as a common reference point for onboarding and KYB processes, particularly in capital markets and cross-border financial activity. By relying on a single, globally recognized identifier, institutions such as custodians, central securities depositories (CSDs), and banks can align internal systems and reduce duplication in entity verification.
This approach has been reinforced by recent industry analysis, including an ISSA paper on onboarding and digital identity, which encourages custodians and CSDs to adopt the LEI as a baseline for client identification. The paper highlights that standardized legal entity identification can support more efficient onboarding, lower operational risk, and improved interoperability across market infrastructures.
According to these assessments, transparent LEI data enables more consistent counterparty due diligence and risk assessment, particularly in complex corporate structures. Observers have noted that the availability of a shared, public dataset reduces dependence on proprietary data sources, which can contribute to both cost and processing delays.
Digital Identity and Verifiable Credentials
Beyond static identifiers, GLEIF has developed the verifiable Legal Entity Identifier (vLEI), a framework that enables organizations to present verifiable credentials in digital interactions. The vLEI is designed to confirm both the identity of a legal entity and the authority of individuals acting on its behalf.
This development reflects a broader industry shift toward reusable digital credentials, which aim to reduce repeated verification and document exchange. Once an entity has been verified, vLEI credentials can be used to demonstrate identity and authorization across multiple counterparties without resubmitting the same information.
In line with recommendations outlined in the ISSA paper, vLEI credentials may also be used to control access to customer-hosted documentation. Rather than transferring sensitive corporate records between institutions, organizations retain custody of their data while granting time-limited and auditable access to verified counterparties. Analysts suggest that this model could improve data protection practices while reducing operational overhead in onboarding workflows.
Applications Across Capital Markets, Payments, and Trade
GLEIF’s initiatives have relevance across several sectors where onboarding inefficiencies have historically constrained scalability and compliance.
In capital markets, the LEI is increasingly used as a common identifier for issuers, intermediaries, and investors across trading, settlement, and custody chains. Industry participants report that broader adoption by custodians and CSDs supports harmonized onboarding processes and reduces reconciliation breaks, particularly in cross-border contexts. The addition of verifiable credentials has also been cited as a potential tool for strengthening digital authorization and auditability.
In payments, particularly in cross-border and instant payment environments, standardized legal entity identification supports automated KYB checks and clearer application of regulatory requirements. This approach aligns with Financial Action Task Force (FATF) Recommendation 16, commonly referred to as the Travel Rule. Recent FATF guidance has reiterated the relevance of the LEI in accurately identifying legal-entity counterparties in payment messaging. The use of standardized identifiers has been associated with improved sanctions screening, reduced ambiguity in AML processes, and lower false-positive rates. Verifiable credentials further support machine-readable compliance checks, enabling higher levels of automation.
In trade and trade finance, LEI-based identity frameworks combined with verifiable credentials enable trusted digital interactions among corporates, logistics providers, and financial institutions. Industry groups such as the ICC Digital Standards Initiative have identified standardized identity as a key enabler of interoperability and trust in digital trade ecosystems.
Compliance in Always-On Markets
A recurring theme in discussions around digital identity is the growing mismatch between 24/7 markets and largely manual compliance processes. Traditional onboarding models, which rely on periodic reviews and document refresh cycles, are increasingly viewed as misaligned with real-time transaction environments.
By integrating standardized LEI data with verifiable credentials, GLEIF’s framework supports the development of more automated and interoperable compliance models. These models are intended to align with regulatory objectives set by bodies such as the FATF while reducing duplication, manual intervention, and operational costs for institutions.
A Public Infrastructure for Organizational Identity
GLEIF operates the LEI system as a global public good, positioning it at the intersection of regulation, industry coordination, and digital infrastructure. Under Alexandre Kech’s tenure, the organization has expanded its engagement with regulators, market infrastructures, banks, and industry associations, including ISSA, the Payment Market Practice Group, and the ICC Digital Standards Initiative.
Industry analysts increasingly describe organizational identity as foundational infrastructure for digital markets, comparable to messaging standards or payment rails. In this framing, the LEI and vLEI are emerging as tools that support trust, transparency, and accountability across global commerce, particularly as markets continue to move toward real-time, data-driven operations.
ISSA, Onboarding, Client Lifecycle Management and Digital Identity in Capital Markets, Nov 2025
FATF, The FATF Recommendations October 2025
ICC DSI, Digitalising Global Trade: A Roadmap to Interoperability and Trust at Scale July 2025
Disclaimer: The information contained in this article is provided for general informational purposes only and does not constitute legal, regulatory, compliance, or financial advice. The content reflects publicly available information and industry perspectives at the time of publication and may not account for subsequent regulatory developments or changes in market practice. Readers should consult qualified legal, compliance, or financial professionals before making decisions based on the information presented.
