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Financial Services

Improving visibility, reducing risk

The financial industry has determined that it needs global standards for all participants and financial products that make up the global financial services supply chain in order to better understand and anticipate systemic risk. After the collapse of Lehman Brothers in September 2008, it became apparent that regulators had no way to understand the systemic risk that Lehman’s bankruptcy posed to the U.S. economy and the global economy.

Standardized Identification System: LEIs

In order to avoid another global economic crisis, regulators and stakeholders in the financial services sector around the world are working towards a set of identification standards – a global “legal entity identifier” (LEI) system. LEIs will enable regulators to have an “early warning system” to detect approaching financial crises.

The LEI system will provide effective tracking and tracing of financial information among financial institutions and corporations throughout the world by issuing a unique, unambiguous identification number to each of the organizations participating in the global financial services supply chain, and tracking associated reference data.

GS1 Brings Expertise to the LEI Initiative

GS1 is ideally positioned to assist the financial services industry with its LEI initiative with:

  • Experience in operating a global system of identification and reference data worldwide
  • Experience in governing such a system via a federated model, which addresses regional preferences, concerns of national sovereignty, and driving costs down through competition
  • Specific GS1 technology components, which can be leveraged to flesh out the vision being implemented by the financial industry. For example, the Global Location Number (GLN) identifier could be incorporated into the ISO 17442 framework, leveraging the existing use of GLNs as legal entity identifiers by many companies.

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Beyond LEI

Beyond helping specifically with the LEI Implementation, GS1 can partner with SWIFT and others in the following areas:

  • Development of a federated model
  • Governance considerations
  • Mobile payments
  • Electronic data interchange standards
  • Global data synchronization

GS1’s Federated Model: Knowledge We Can Share

GS1 operates under a federated governance model through its 110 country-based Member Organizations. This model:

  • Adapts to local customs and preferences
  • Accommodates national preferences for public versus private, business methods, etc.
  • Provides for competition in markets where acceptable, driving down costs
  • Allows for government oversight in each market
  • Permits information to be protected/accessed according to national laws
  • Synchronization so that end users see consistent data worldwide
  • Features governance at both the global and national levels, protecting nations’ financial markets

GS1’s Role in Cash Handling

Within financial services, the GS1 system already supports the ordering and depositing of cash for banks and other commercial enterprises in Germany, Italy, Spain, and France.

Contact GS1 and Shape the Future of Financial Services

For more information or to contribute your expertise to help us develop better and more reliable solutions using global standards, contact + 1 937.435.3870.