The research was conducted by McKinsey on behalf of the Global Legal Entity Identifier Foundation (GLEIF). With estimated total industry spend on client onboarding equal to USD 40 billion per year, productivity improvements gained through LEI usage could generate cross-sector cost reductions of between 5-10% annually.
LEIs are already used in capital markets globally, where regulators have mandated their use for reporting over-the-counter derivatives transactions. The ability of LEIs to simplify entity identification in the digital age has the potential to unlock more quantifiable value for banks in the near to mid-term.
The study also found that:
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