The Role of Corporate Digital Identity (CDI) in Modern Banking

Today in the field of financial operations, Corporate Digital Identity (CDI) has emerged as a vital tool for banks to efficiently and securely authenticate corporate entities.

CDI operates by electronically capturing and verifying a corporate customer’s unique attributes and data in real-time. This process involves collecting specific information directly from the customer and supplementing it with data from official records and commercial sources, creating a robust digital identity for authentication.

The primary benefit of CDI is its ability to streamline regulatory compliance across various jurisdictions. By standardising CDI to include essential regulatory attributes, banks enhance their customer due diligence processes, promote transparency, and support accurate financial reporting. This transparency is crucial for identifying potential financial crimes and ensuring the financial system remains secure and compliant with regulatory requirements.

CDI provides a singular, portable digital identity that simplifies interactions within banks and across different sectors. This approach reduces friction in customer service and supports the introduction of new banking services while maintaining regulatory compliance.

In addition to meeting compliance standards, CDI offers several other advantages. It helps banks manage access to sensitive data through integrated systems that adhere to privacy regulations. CDI supports granular, role-based access control, centrally managed across various internal systems. Moreover, it ensures transaction integrity and authenticity using multi-factor authentication and public key infrastructure.

CDI’s standardised attributes also facilitate secure, seamless interactions within complex ecosystems, aiding in Know Your Customer (KYC) onboarding and due diligence processes.

International standards, such as the Global Legal Entity Identifier (LEI) system, provide unique identifiers for legal entities, which simplifies tracking ownership across different jurisdictions. These standards support the implementation of KYC processes by ensuring reliable verification of beneficial owners' identities, thus promoting transparency and preventing illicit activities.

Automation in identifying beneficial ownership, supported by these standards, streamlines the process and integrates with technologies for real-time updates, enhancing security and ensuring data consistency.

To identify an Ultimate Beneficial Owner (UBO), detailed information such as ownership, tax identity, and decision-making authority is required. CDI stores these attributes, enabling accurate UBO identification across various bank functions. This drives efficiency in the KYC onboarding process and ensures compliance with global regulatory requirements, including GDPR, KYC, and AML.

By establishing robust CDI standards, banks can enhance the accuracy and reliability of ownership data, reduce manual interventions, and better safeguard the financial system against illicit activities.