BIS & GLEIF collaborate on KYB and AML efficiency in SME cross-border open finance
The Global Legal Entity Identifier Foundation (GLEIF) and the Bank for International Settlements (BIS) have demonstrated how the Legal Entity Identifier (LEI) can bring new Know Your Customer/Business (KYC/B) and Anti-Money Laundering (AML) process efficiencies to small and medium-sized enterprises (SMEs) when using open banking and open finance APIs to initiate payments and open business accounts across borders.
Project Aperta, run by the BIS Innovation Hub Hong Kong Centre, has designed, developed, and tested a prototype for cross-border open finance interconnectivity. It has created a ‘network of networks’ that connects existing domestic open finance networks in the United Kingdom, United Arab Emirates, Brazil, Hong Kong, and India, through a neutral interoperability layer. When an end-user organization identifies itself with an LEI, this helps streamline the required KYB and AML checks, demonstrating how cross-border open finance interconnectivity can make financial services more accessible and efficient while reducing duplication, compliance costs, and onboarding times for businesses.
Currently, domestic open finance frameworks resist interconnectivity and interoperability because they adhere to different technical standards, data formats, and trust frameworks. As a result, organizations doing business across borders – especially SMEs – frequently encounter repeated manual checks, duplicated document submissions, and lengthy onboarding processes, limiting their access to overseas accounts, credit, and trade finance. By connecting domestic open finance infrastructures, Project Aperta demonstrates how data flows across borders can be eased, enabling businesses to access more seamless, integrated banking and trade finance services when operating cross jurisdictions.
By demonstrating how the combination of open finance data, payments frameworks, and the Global LEI System can simplify AML and KYC/B, Project Aperta directly addresses two pain points highlighted in the G20 Roadmap for Enhancing Cross-Border Payments.
Project Aperta also points to how integrating globally recognized identifiers such as the LEI could support emerging digital asset ecosystems by enabling the exchange of verified legal entity data between financial institutions, digital asset platforms, and regulators – and could contribute to greater transparency, risk management, and regulatory oversight in tokenized finance and cross-border digital asset transactions.
Alexandre Kech, CEO, comments: “Any web of domestic networks that seeks to make legal entity data portable across borders needs a globally standardized system of verified organizational identity. The Global LEI System serves this purpose precisely: it helps infrastructure, businesses, and entities make verified business data as widely available as possible, globally. When the LEI is added as a data attribute in a cross-border payment message, or consulted in a business account opening process, the associated legal entity can be precisely, instantly, and automatically identified across borders. We’ve been delighted to collaborate with the Bank for International Settlements to showcase these capabilities as part of Project Aperta.”
The project was carried out in collaboration with the Hong Kong Monetary Authority (HKMA), the Central Bank of Brazil, the Central Bank of the United Arab Emirates, and the Financial Conduct Authority (FCA) of the United Kingdom, together with participation from GLEIF, the International Chamber of Commerce Digital Standards Initiative (ICC DSI), and the Hong Kong University Standard Chartered Foundation FinTech Academy. The prototype was tested alongside private-sector commercial banks and fintechs.
Project Aperta continues the industry’s momentum toward the inclusion of the LEI in cross-border payment messages. This follows recognition from leading industry stakeholders, including the Financial Action Task Force (FATF), BIS’ Committee on Payments and Market Infrastructures’ (CPMI), The Wolfsberg Group, and the Swift Payment Market Practice Group (PMPG).