Banks’ love-hate relationship with LEI codes

Banks and LEI codes

Initially, retail banks were reluctant to embrace LEI codes. It felt like more work for them, and it slowed everything down when they had to ask their customers to go get an LEI code before their company was allowed to engage in financial transactions. Last but not least, it was an expense that everyone felt they could do without.

‘What’s an LEI code?’ and ‘Why do I need an LEI code?’ are questions that we still encounter from small business owners that have been asked by their bank to get an LEI code. We like helping them understand the reasoning behind the LEI system - and take care of the practical matters for them, so they save time and trouble.

We believe that that’s what a good LEI provider should do.

How LEI codes can help retail banks

Nowadays, retail banks have come to terms with the fact that LEI codes are here to stay, and up-front customer adherence to compliance regulations is an advantage for them. Also, banks are more careful about following the rules because it has consequences when they don’t. Fines due to crackdowns by local authorities have occurred regularly over the past few years, and no one wants to run the risk of suspended trading and delayed reporting.

Banks also appreciate that the LEI system can work to their benefit and help them save time and trouble with the onboarding of new customers and adherence to AML processes and procedures.

Last but not least, cross-border payment legislation is around the corner, as per GLEIF and the Financial Stability Board, and early adopters include India. In short, the LEI train isn’t about to stop - if anything, it’s gaining steam.

Global FinReg’s offering

Over the years, we have been getting more and more retail bank referrals. We like to think that the banks have come to realize that we have a lot to offer. We have the best technology platform and customer service of any LEI provider, and we can help bank advisers set up notification systems, watchlists, and other tools to ease their KYC processes and reporting.

In short, we’re their one-stop shop for anything LEI-code-related.

We don’t make any money from offering these tools to the banks. But we think that they have come to appreciate that we help them by 1) saving them time and trouble, and 2) making life easier for their customers.

The importance of the platform and customer service

The global LEI system has been around for some years now. As a compliance must-have, it’s not going away - if anything, it’s becoming more widespread, and the use cases for LEI codes and vLEIs are piling up.

The retail banks have gotten used to the idea of LEI codes. They also know the LEI registration agents: our systems, track record, and how we work. They understand that we can offer them tools to make their life easier. And what’s not to like about that?

Please contact us here, if you have questions or need help with registering, renewing or transferring your LEI code.