Why the Legal Entity Identifier is the missing trust layer in global trade

At the recent Ascertia Global Trust Summit in London, Ubisecure RapidLEI joined leaders from across the digital identity, PKI, and regulatory communities to explore how trusted organisation identity can strengthen cross-border commerce. The event, hosted by Ascertia, was an extraordinary forum for collaboration and united experts who share a common goal: creating a more secure and transparent digital economy.

For compliance, risk, and product managers in banking, fintech, and supply chain sectors, one challenge consistently slows progress: trust does not scale across borders.

A company that appears legitimate in one jurisdiction can be opaque in another. Onboarding often involves repeated due diligence checks. Regulators expect transparency, yet existing organisation identity systems are fragmented and inconsistent. In this environment, fraudsters and sanctioned entities exploit gaps.

The consequences are clear. Legitimate organisations experience delays in onboarding, higher compliance costs, and exposure to financial crime or reputational damage.

Ubisecure’s Exec Chair, Tom Edwards, joined Ascertia on stage to discuss this topic, and specifically how the Legal Entity Identifier (LEI) was designed by the G20 to address this growing problem. Governed by the Global Legal Entity Identifier Foundation (GLEIF), the LEI is a universal standard for a reliable, trusted and well governed organisational identity that’s publicly accessible and independently verified. It delivers a verifiable answer to the most fundamental question in finance and trade: Who are you really doing business with?

 

Digital trust as a growth driver

Trust is often treated as a defensive concept, i.e. something that reduces risk. But in practice, trust is also a growth driver.

When organisations can rely on standardised and verifiable organisation identity data:

• Transaction costs fall. Fewer repeated checks mean less duplication of effort.
• Onboarding speeds up. Partners, suppliers, and clients can be validated in hours rather than weeks.
• Scale becomes achievable. Trusted data reduces barriers to entering new markets.

As the World Trade Organization has emphasised, trusted, open data regimes directly influence the speed and scale of cross-border trade. For compliance and product managers, this means trust isn’t just about preventing fines or tackling fraud, it’s about enabling competitive advantage.

 

The trust problem in practice

Identity verification for organisations has long been fragmented. Local company registries, proprietary databases, and industry-specific identifiers both compete and compliment, but rarely align. Historical organisational identifiers have been available only to subscribers or rely on companies self-reporting. This creates duplication and inefficiency for compliance teams and leaves blind spots in risk frameworks.

These gaps manifest in high-profile failures and costly real-world events. As Tom demonstrated during his presentation:

Case study 1: PPE procurement during COVID-19

During the pandemic, governments and healthcare providers urgently sourced personal protective equipment (PPE). Many offers came from previously unknown suppliers. Without reliable verification mechanisms, buyers fell victim to fraudulent contracts and undelivered goods. The issue became so widespread that the FBI even had to issue warnings to US hospitals about advance payment fraud. Billions were wasted globally, and frontline workers faced shortages. If procurement processes could have relied on standardised and verifiable organisational identity such as LEIs, many of these suppliers could have been validated, protecting both budgets and lives.

Case study 2: The Ever Given in the Suez Canal

In 2021, the Ever Given container ship blocked the Suez Canal, halting global trade for nearly a week. Beyond the shipping delays, insurers and regulators faced immediate questions about liability. The difficulty stemmed from complex and opaque corporate ownership structures: the vessel was registered in one country, owned by a shell company in another, and operated elsewhere. Arguably, with LEI-linked ownership data, establishing accountability would have been faster and more transparent, streamlining crisis management.

Case study 3: Russian sanctions and shell companies

Sanctions imposed on Russian entities following the invasion of Ukraine revealed how easily sanctioned individuals can operate through layers of shell companies. Enforcement agencies, financial institutions and global trading organisations struggled to track ultimate ownership. LEI Level 2 “who owns whom” data, which maps parent–subsidiary relationships, enables regulators and firms to see through corporate structures. Combined with verifiable credentials, this provides a more effective barrier to sanctioned or high-risk entities entering the global financial system.

 

Why the Legal Entity Identifier just works

The LEI stands out because it is:

• Global: A single identifier valid across jurisdictions and industries.
• Regulated: Administered by GLEIF, ensuring governance and consistency. The process to obtain an LEI is essentially the only regulated KYB process in effect.
• Public and verifiable: Records are accessible, open, and subject to ongoing updates, challenges and validation.
• Extensible: With the advent of the verifiable LEI (vLEI), cryptographically secure credentials can bind people to organisations, confirming not just the entity but also the authorised representatives acting on its behalf.

For compliance and product managers, this translates into streamlined onboarding, reduced duplication of effort, and stronger protection against fraud.

 

How the vLEI works

The vLEI represents the next stage in organisational identity. Issued under GLEIF governance and built on W3C Verifiable Credentials, the vLEI provides strong cryptographic proof of identity.

Key elements include:

• Qualified vLEI Issuers (QVIs): Accredited organisations authorised by GLEIF to issue vLEIs, ensuring quality and consistency worldwide.
• Role-based credentials: Linking individuals to their organisations through the LEI. This confirms not just the entity but also the authority of the person acting on its behalf (for example, a CFO signing a regulatory filing).
• Interoperability: Built to work across digital identity systems, including integration with the European EUDI Wallet.

This model provides the most robust assurance yet that the entity, and the individual representing it, are exactly who they claim to be.

 

The GLEIF governance framework

One of the LEI system’s greatest strengths is its governance model under the GLEIF. The GLEIF accredits and oversees LEI Issuers (formally referred to as LOUs) like Ubisecure RapidLEI, Bloomberg and the London Stock Exchange, ensuring that every LEI issued meets global standards. With the vLEI, this governance extends to QVIs, creating an auditable and accountable ecosystem.

For compliance and product managers, this means LEIs and vLEIs are not just technical identifiers, they are backed by a regulated global framework designed to provide reliability and trust at scale.

 

The European push: eIDAS 2.0 and the EUDI Wallet

Europe is advancing digital identity through eIDAS 2.0, which introduces interoperable frameworks across the EU. A key component, the European Digital Identity (EUDI) Wallet, will allow citizens and organisations to hold and share secure credentials across borders.

Within this framework, LEIs are recognised as trusted organisational credentials. This ensures that identity verification does not fragment further but converges around interoperable global standards.

For banks and fintechs, the implication is clear: LEIs are evolving from regulatory identifiers to foundational tools of digital interoperability. For supply chain operators, the EUDI Wallet points to a future where every participant in the chain can be validated against a global standard.

 

Next steps for organisations to drive growth

The following actions remain the most effective way to drive progress and growth:

1. Adopt LEIs for all your entities and clients. Extend coverage across subsidiaries and customer networks.
2. Consider near-term use cases. Integrate LEIs into existing compliance and onboarding processes to benefit from immediate operational efficiencies.
3. Plan for vLEI applications. Identify where verifiable credentials could improve digital authorisations and transactions.
4. Engage in pilots. Participate in eIDAS 2.0 and EUDI Wallet initiatives to ensure early readiness.

LEIs are the centre of many operational efficiencies, regulatory compliance or growth drivers.

 

How to get started with LEIs

Organisations can obtain LEIs from RapidLEI through several models:

• Direct registration of LEIs with RapidLEI. The process is quick and easy, and thanks to our automation technologies, the LEI is usually issued in just minutes.
• Bulk or enterprise issuance, ideal for groups with multiple legal entities or complex grouwp structures.
• GLEIF Validation Agents or other RapidLEI partnership models. Banks, regulated institutions, wealth managers can register LEIs seamlessly and open new revenue streams, differentiate services, and clean client data.
• Registration or Client Agents are designed for organisation managing clients to issue LEIs directly to their clients by reducing friction and adding value.
• Solution Providers can build LEI registrations into systems and processes as value add or service enhancement

Understanding these engagement models helps compliance teams choose the most efficient path to adoption. We strongly encourage you to speak to our LEI experts to determine which model is most suitable for your organisation.

 

Why Ubisecure RapidLEI

As the #1 LEI Issuer globally, Ubisecure RapidLEI leads in deployment, automation, and innovation:

• Managing the largest LEI portfolio in the Global LEI System.
• Leading in Validation Agent programmes (3 out of 4 GLEIF VAs choose RapidLEI)
• Delivering automated, scalable workflows with multi-year support and APIs.

RapidLEI makes LEIs accessible, reliable, and impactful for both individual entities and large-scale enterprise clients.

 

Next steps

For compliance, risk, and product managers, the question is no longer whether to adopt the Legal Entity Identifier, but how quickly. The LEI and vLEI together provide the infrastructure needed for safer, faster, and more transparent global transactions.

Discuss with RapidLEI how LEIs can support your organisation. Our team can provide demos, useful assets, and help you understand sector-specific examples.

 

FAQ: Legal Entity Identifier basics

1. What is a Legal Entity Identifier (LEI)?
   A 20-character code that uniquely identifies legal entities worldwide. It is the only globally standardised and regulated organisation identity (KYB) system.
2. Who governs the LEI system?
   The system is governed by the Global Legal Entity Identifier Foundation (GLEIF), which accredits LEI Issuers. The GLEIF was established by the G20 and Financial Stability Board (FSB).
3. How does the LEI reduce compliance costs?
   By providing a single, globally recognised identifier that operates across borders and verticals, the LEI simplifies onboarding, delivers trusted organisational identity, and streamlines regulatory reporting and KYB processes.
4. Which industries gain the most from LEI adoption?
   Historically, the greatest impact is in banking, fintech, and supply chain management, but adoption is now expanding into payments (specifically instant payments and verification of payee), shipping, insurance, and well beyond.

 

Events photos courtesy of Ascertia.