Adoption of the LEI code as an example of workflow complexity reduction
The recent announcement from the Global Legal Entity Identifier Foundation (GLEIF) that over half of front office staff spend 27% of their working week onboarding new client organisations highlights today’s wide-spread challenges around data set-up and data quality.
The research shows that 50% of financial institutions use, on average, four identifiers to help identify client organisations and the onboarding process takes, on average, six weeks. 57% of respondents also agree that reliability of reference data is a challenge.
GLEIF has called for a globally accepted approach based on broad adoption of the Legal Entity Identifier (LEI) to remove complexity from business transactions and deliver quantifiable value to financial services firms.
LEI uptake in Q1 2018 has significantly exceeded historic data, with about 168,000 LEIs issued in the first quarter driven by the anchoring of the LEI code in MiFID II, compared to 19,000 issued in the first quarter of 2017.
Whilst this growth in the LEI universe reflects the regulatory push for clear identification of financial markets’ participants and accurate, actionable data, combined with the GLEIF research it further reinforces the necessary changes to firms’ traditional sourcing, mastering and distribution processes. It also puts pressure on financial institutions to ensure they really understand their data management processes.
Data confidence is a fundamental requirement in post financial crisis trading. This means firms need to be able to provide end users with access to a simplified view of the data acquisition, cleansing and provisioning process for each data source in order to foster a common, companywide understanding of the data and how it is used.
Ultimately, ensuring data quality and confidence is the lynchpin to improved workflows, increased operational efficiency and reduced operational and regulatory risk.