Legal Entity Identifiers in digital certificates
Digital certificates are hugely crucial in encrypting the internet. Whether for encrypting a website and adding the ‘S’ to HTTPS or encrypting and signing a digital document like a PDF, digital certificates are everywhere. Until now, they have solved some great security challenges on the internet by encrypting networks and communication channels. However, as we know, encryption is not always enough.
You can keep information encrypted, but if you’re sending it to a criminal, then encrypting it does nothing. As an example, imagine visiting an online shop. The shop is encrypted, so you feel safe to buy something and enter your credit card information. Later, you realise the shop was merely a phishing site, and you’ve sent sensitive information to a cybercriminal. This is a regular occurrence on the internet today.
It’s not enough to know your information is protected. Today, we need to know who is receiving that information and be sure that we can trust them. HTTPS websites used to have the option of adding identity to the certificates. Still, getting one was far too easy if you were a cybercriminal and the people doing the vetting were the same people selling the certificates, so there wasn’t much motivation to improve the process. Even code signing certificates (used to protect us from malicious apps) were obtained by cybercriminals to sign apps that would infect our computers and phones.
LEIs are organisational identity
Legal Entity Identifiers (LEIs) are gaining massive adoption in the financial industry to identify organisations. Any organisation trading on the financial market today must have an LEI and declare their parent and child companies on that LEI.
This database of Global LEI Index is open and accessible for anyone to access or challenge the data. LEIs are issued by GLEIF-accredited Local Operating Units (LOUs). The power of a third-party identification system is vast and can be relied upon now for global financial reporting to comply with regulations like MiFID II, EMIR, and MiFIR.
Beyond trade reporting, LEIs have already been dubbed a new tool to help save the Know Your Customer (KYC) and other due diligence processes in onboarding a customer. Using LEIs in digital certificates could increase the efficiency of this system even further.
For example, in Open Banking, where banks are opening up APIs to FinTech companies, two servers must communicate. eIDAS requires that these communication transactions be signed with a Qualified Certificate, but what if those certificates contained a Legal Entity Identifier? Right now, the identity vetting in the Qualified Certificates is done by a certificate authority and is unavailable on an open database. It’s also possible to change company details without the certificate details changing. This can create areas of vulnerability that a hacker can exploit.
What’s available now
Legal Entity Identifiers are not yet integrated with all digital certificates, but you can obtain an SSL/TLS Certificate with a LEI and a Digital Signing Certificate with a LEI.
A good use case for digital signing is B2B transactions that involve paper-based document signing, such as contracts and agreements. An organization looking to take these workflows online and make them paperless would benefit from having the additional security of LEI codes attached to the certificate that encrypts and signs the document.
This LEI code can be checked against the onboarding data, reducing friction and time associated with transactions between two parties.
Interested in obtaining a Legal Entity Identifier for your business? Get one here today.
