USING LEGAL ENTITY IDENTIFIER (LEI) ON BLOCKCHAIN FOR REDUCING MONEY LAUNDERING RISKS AT FINANCIAL INSTITUTIONS
DOI:
https://doi.org/10.17770/acj.v1i93.6733Keywords:
LEI, blockchain, anti-money laundering, risk assessment, risk managementAbstract
The increasing use of blockchain technology nowadays can play a key role in using the decentralized network as a standard database for the unified and secured registry, through which financial institutions can conduct a relevant customer due to diligence measures and business transactions by verifying organizations’ Legal Entity Identifier (LEI) codes, self-sovereign identifiers managed by the Global Legal Entity Identifier Foundation (GLEIF). With proper implementation, this solution can be applied to blockchain networks, offering the additional advantage of quality control and detailed business analysis. Thus, by giving financial institutions the benefit of interacting with legal entities that have proved their reputation and, therefore, by reducing the money laundering risk at financial institutions, blockchain technologies now could reach global standardization and acceptance by financial institutions worldwide.
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