Over Half of Salespeople in Banking Spend 27% of Their Working Week Onboarding New Client Organizations
How the LEI can help banks to speed up KYC processes
Author: Stephan Wolf
Date: 2018-10-25
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The Global Legal Entity Identifier Foundation (GLEIF) has undertaken research with specialist agency, Loudhouse, to identify the key challenges of legal entity identification in financial services. The research surveyed over 100 senior salespeople in the banking sector in the UK, U.S. and Germany.
Six in ten salespeople (57%) spend 27% of their working week onboarding new client organizations.
50% of financial institutions use, on average, four identifiers to help identify client organizations.
The process takes, on average, six weeks (seven weeks, if more than four identifiers are used).
This length of time spent onboarding, including know your customer (KYC) due diligence, creates a significant burden as salespeople have less time to work on key aspects of their job function, such as acquiring new business and servicing existing clients.
The onboarding burden
In a globalized digital economy, verifying the identity of customers, partners and suppliers is becoming an increasingly time-consuming, complex and costly challenge.
49% of survey respondents say that middle-and back-office activities related to onboarding are a major burden.
55% of respondents agree that prospects might turn to competitors if it takes too long to onboard a new client organization.
Once the client is established, client data must be kept up-to-date throughout the business relationship. This includes regular verification of business card information and changes to the ownership structure. Identifiers of legal entities are easily obtained from a host of different issuers but are not kept up-to-date in a systematic way. Overall, only two thirds of financial institutions believe they hold accurate client information.
The crux of the problem is the lack of a standardized approach to legal entity verification.
The solution
Financial services businesses can save time, gain greater transparency and work in a more streamlined fashion by adopting a Legal Entity Identifier (LEI) for each client organization. Banks operate in multiple jurisdictions and therefore need a global standard. The LEI offers businesses a one-stop approach to identifying legal entities. Via the Global LEI Index, we make available the largest online source that provides open, standardized and high quality legal entity reference data. No other global and open entity identification system has committed to a comparable strict regime of regular data verification.
Integrating the LEI into other entity verification methods, including solutions based on digital certificates and blockchain technology, will allow anyone to easily connect all records associated with an organization, and identify who owns whom. By becoming the common link, the LEI will provide certainty of identity in any online interaction, making it easier for everyone to participate in the global digital marketplace.
Download the free report ‘A New Future for Legal Entity Identification’ (see ‘related links’ below) to learn more about our research results and the potential capabilities and benefits afforded by adopting an LEI for each client organization.
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Stephan Wolf was the CEO of the Global Legal Entity Identifier Foundation (GLEIF) (2014 - 2024). Since March 2024, he has led the International Chamber of Commerce (ICC)’s Industry Advisory Board (IAB) of the Digital Standards Initiative, the global platform for digital trade standards alignment, adoption, and engagement. Before he was appointed as Chair, he had been serving as Vice-Chair of the IAB since 2023. In the same year, he was elected to the Board of the International Chamber of Commerce (ICC) Germany.
Between January 2017 and June 2020, Mr. Wolf was Co-convener of the International Organization for Standardization Technical Committee 68 FinTech Technical Advisory Group (ISO TC 68 FinTech TAG). In January 2017, Mr. Wolf was named one of the Top 100 Leaders in Identity by One World Identity. He has extensive experience in establishing data operations and global implementation strategies. He has led the advancement of key business and product development strategies throughout his career. Mr. Wolf co-founded IS Innovative Software GmbH in 1989 and served first as its managing director. He was later named spokesman of the executive board of its successor, IS.Teledata AG. This company ultimately became part of Interactive Data Corporation, where Mr. Wolf held the role of CTO. Mr. Wolf holds a university degree in business administration from J. W. Goethe University, Frankfurt am Main.
