The LEI ecosystem is constantly evolving, with new cases and realised benefits driving increased adoption globally. As part of RapidLEI’s Partner Spotlight series, I caught up with Darragh Hayes, Group CEO at LEI Worldwide, to discuss how LEI Worldwide is responding to these increased opportunities.
LEI Worldwide is a Registration Agent (RA) with coverage of all global jurisdictions. It is a virtually based business with staff located across Ireland, connected through its cloud-based operating model. Read more about LEI Worldwide’s partnership with RapidLEI in our press release (July 2019).
Q: First up, tell us a little about LEI Worldwide.
A: LEI Worldwide is an Official LEI Registration Agent, one of the first Registrations Agents approved by GLEIF since the inception of the LEI. We provide expedient, streamlined and client focused LEI management services globally. Our client base includes financial institutions such as banks, asset management and law firms. We have a portfolio of global entertainment providers and a growing client base in the blockchain, Decentralised Finance (DeFI) and crypto project space. These are some of the core sectors that sit alongside other regulated entities which are required to use the LEI as part of their regulatory obligations.
Securing & maintaining LEIs has previously been a disjointed and a risk-fraught process. We in LEI Worldwide try to make it easier and faster to apply for LEI numbers, manage large portfolios, and reduce the risk of non-compliance or failed transactions.
Thousands of organisations around the world trust our solution, enjoy our client-focused service, to quickly and easily register LEIs, often on behalf of their clients. Using LEI Worldwide allows them to meet their regulatory obligations in a timely manner. The LEI is also being used to facilitate faster on-boarding of new clients by streamlining existing KYC and AML processes by leveraging a globally trusted identifier.
LEI adoption is growing exponentially. What do you see as the key drivers behind this growth?
The rate of LEI adoption has been generally consistent over the last 6 months, with roughly 20,000 new LEIs being issued per month. We have observed adoption since 2018 and it has primarily been driven by regulation, but as the marketplace is now becoming more familiar with the versatility and interoperability of the LEI it is being voluntarily adopted to add an extra layer of standardisation around a traditionally fragmented and challenging piece of the identity puzzle.
“As the marketplace is now becoming more familiar with the versatility and interoperability of the LEI it is being voluntarily adopted.”
Why is this growth occurring now?
Digital ecosystems and the e-commerce arenas are not new to the world but the recent two years has enflamed the activity of the global population with e-commerce platforms to a new height. Dependency on global supply chain has never been higher. For certain corners of society, income has never experienced such fragility with repetitive lockdowns and business closures. It has distilled focus of every purchaser from retail to institutional to the identity and traceability of the vendor. In addition the rise of cybercrime, scams and phishing has the general public in a frenzy about identity and trust that the vendor they send their money to, does exist and will deliver. E-Commerce and the role of the LEI, Small & Medium Enterprise and the role of the LEI are new waves of adoption that will surpass the financial world.
What are some drivers of ‘voluntary’ adoption of the LEI as opposed to regulated?
The LEI is now being used in developing economies where some companies may find it difficult to access high quality documentation, which is a barrier to securing funding from heavily regulated economies such as the EU or the United States. Many of our clients request LEI Certificates to generate trust around their legal status, and therefore the LEI is going a long way towards enhancing financial inclusion and stimulating the global economy as a whole.
“The LEI is going a long way towards enhancing financial inclusion and stimulating the global economy as a whole.”
The world has truly become one big digital marketplace, and it is time that businesses settled on a single source of corporate identity verification across all industries; the LEI is exactly that.
Adoption will grow as regulators, private sector companies and governments come to realise new use cases for a globally standardised form of corporate identity, I spoke previously about its “swiss-army knife” like functionality and one possible use case being Central Bank Digital Currencies and blockchain applications. Possibilities for innovation are endless.
What’s needed now to push LEI adoption even further, and how is LEI Worldwide preparing to facilitate this growth in adoption?
The wider benefits of a global identifier such as the LEI are only realised when it is being widely used. Two things are required in order to drive LEI adoption to a point where this can happen.
The first is continuing to promote and educate relevant bodies such as governments and large GIFIs (Globally Important Financial Institutions) on the benefits and savings in resources and time that can be gained by leveraging the LEI fully. We have seen countries like India take this approach, and LEI Worldwide are doing our part to educate and inform. This January I was in Dubai at a meeting with the UAE Ministry of Finance to discuss the LEI and its potential to bolster the already great work they are doing with regards to AML.
The second is to develop the systems capable of handling the large volume of LEI processing requests that would come with an enhanced LEI adoption rate. LEI Worldwide has released its new system for registering and managing LEIs called RAMP 2.0. RAMP (Registration Agent Management Platform), and is a proprietary software tool for managing the entire process of LEIs including maintenance of all corporate data linked to each LEI.
How does RAMP reduce risk associated with LEI management?
One principle we are trying to engender to the marketplace is the operational risk and its likely compensation impact of failing to renew. Particularly in financial markets, where the mantra is No LEI No Trade, this is critical. We have coined the phrase Renewal Risk for this. Dependency and speed is increasing exponentially, the permeation and impact of Renewal Risk is asymmetric. The asymmetricity between the cost of a renewal and financial trading compensation can be astounding. We see it as a company mission to highlight the avoidance of this unnecessary chasm of impact by the frugal cost of the renewal. We acknowledge it’s not the cost of the renewal is the catalyst to Renewal Risk, it’s the user experience and ease of executing the renewal. RAMP 2.0 manages that for clients.
“It’s not the cost of the renewal is the catalyst to Renewal Risk, it’s the user experience and ease of executing the renewal.”
How does RAMP work to achieve scalability and how is it different from other solutions?
RAMP has leveraged automation to put our clients on what we call ‘the happy path’ to their LEIs. The system is capable of processing huge volumes of LEI applications, and automates previously clunky manual processes such as generating Letters of Authorisation and LEI Certificates. Most other RA solutions are jurisdictionally based, whereas RAMP offers global LEI coverage.
This means RAMP can also be used by banks, e-commerce platform providers and other financial institutions to import their existing LEIs into a single control account. We have often seen multinational or international firms have their LEIs scattered across providers, offering little visibility into the health of their LEI portfolio.
So, we are well prepared to play our part in facilitating this global move to the LEI as a standardised form of corporate identification and well prepared for the growth in adoption. Our engineering has tethered our processing engines to RapidLEI via API protocols. It is this form of digital partnership that, in a very mutually beneficial way, augments the marketplace for LEIs, where the end beneficiary is always the client.
How does RapidLEI technology help LEI Worldwide with its mission for automation and scalability?
LEI Worldwide spotted early on that RapidLEI was innovating in the space and bringing fresh ideas to the table. This is testament to the fact that RapidLEI have now surpassed traditional Local Operating Units such as Bloomberg and the London Stock Exchange in volume of LEIs ordered.
LEI Worldwide’s RAMP solution is powered by the RapidLEI software and acts as the engine that affords us connectivity to company registries data globally and use that data to provide LE-RD that is of the highest stands in the industry as shown in the GLEIF data quality reports.
“LEI Worldwide’s RAMP solution is powered by the RapidLEI software.”
Everything we do henceforth is to remove friction in manual processes by streamlining with new approaches, and we view our partnership with RapidLEI as key to achieving the level of scalability required by the LEI ecosystem.
Do you have any final thoughts you’d like to share with our readers?
Yes, we would like to share that LEI Worldwide aligns itself with the mission that the GLEIF has set out and the roadmap it has created to achieve it. We will continue to play our role in supporting the frameworks brought forth such as the vLEI and Validation Agent (VA) system. We have already constructed our first VA solution called VA-Assist and will be making announcements about it in the near future about our first two mandates. In the meantime, please feel free to reach me directly for any questions or queries and I will be happy to assist.
Find out more about LEI Worldwide at www.leiworldwide.com.