WFIC Day 2: The LEI Course

There are numerous websites set up to explain how education will change the world. But they are typically not reference data-focused. After today’s discussions at the World Financial Information Conference in San Francisco, I think I’ve discovered a gap in the market here.

With the current regulatory environment, education is increasingly important in our industry. It is important to persuade global regulators to support the legal entity identifier (LEI), and it is important to ensure senior management understand the potential benefits that can be realized by investing more in improving entity data management as part of an LEI project.

In a poll at the conference, the majority of delegates said the LEI will be a positive global game-changer, so it is clear the financial information community understands the benefits. There is nothing really to disagree about here.

The ones who disagree are typically not part of the data management community. They are perhaps the ones that have not fully understood how the processes work today and how a unique identifier could help change the situation. This is why education has been, and will continue to be, an essential part of the work on the LEI, explained panelists.

The global regulatory community needs to come on board. Speakers called for market participants to discuss the LEI with regulators, and ask them to adopt this in their rule-making. Financial information professionals in other countries should be encouraged to reach out to their local regulators, and continue the education process. The momentum in the US and Europe is a starting point, but the LEI still needs to be global. As long as the dialogue continues, we can still get there, said speakers.

But education is not just important from a regulatory perspective. It is also essential for data management professionals to continue the internal education process. The LEI introduction can create an opportunity for firms to do more around data management, and panelists said it can even be a launch pad to streamline reference data processes. I think it was encouraging to hear that some have already started scrubbing and preparing for the LEI, aiming to make the most of its introduction.

Yet, this type of strategic approach is dependent on senior management buy-in. When senior management is fully aware of the potential benefits and support a broader project around entity data, the LEI can result in significant improvements in this space.

This is where we need to get to. I’m not sure a new website would be the answer, but communication aimed at educating decision-makers certainly is.