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Corporate digital identity: no silver bullet, but a silver lining

Author

Listed:
  • David Leung
  • Bénédicte Nolens
  • Douglas Arner
  • Jon Frost

Abstract

Corporate digital identity (ID) has the potential to dramatically simplify the identification and verification of companies and to reduce the risks and costs of doing business. It forms a kind of admission ticket for a company to access financial and non-financial services while at the same time enhancing access to information about the company for counterparties, customers, regulators and financial services providers. Provided there is political will, technological innovation and policy can help in several areas to facilitate corporate digital ID and thus enhance overall efficiency, market integrity, financial stability and inclusion. Yet there is no silver bullet that can achieve all these benefits at once. Nor can any single stakeholder drive all the needed changes; corporate registries, banks and other financial institutions, established vendors, emerging regtech firms, and regulators and policymakers all have a role to play. The Legal Entity Identifier (LEI), decentralised identifiers (DIDs) and reforms built on public individual digital ID systems show particular promise, particularly for small and medium-sized enterprises, thereby supporting broader sustainable development, employment and innovation. In this paper, we examine these innovations in corporate digital ID and explore pathways for the future.

Suggested Citation

  • David Leung & Bénédicte Nolens & Douglas Arner & Jon Frost, 2022. "Corporate digital identity: no silver bullet, but a silver lining," BIS Papers, Bank for International Settlements, number 126.
    • Handle: RePEc:bis:bisbps:126
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    References listed on IDEAS

    as
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    3. Derryl D'Silva & Zuzana Filkova & Frank Packer & Siddharth Tiwari, 2019. "The design of digital financial infrastructure: lessons from India," BIS Papers, Bank for International Settlements, number 106.
    4. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
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