In the current era of digitalization, the economy of the world has been reliant on digital certificates. The remarkable properties of digital certificates have pushed people to drift away from traditional paper-based documentation to the digital and highly safe mode of business. The business partner can now be on the same page and perform different certified activities in a highly trusted environment. However, despite all the efforts and hard work, there still are flaws in the system which need to be addressed.
The Missing Elements
As the certificates are being used in higher amounts everywhere, they require more time and effort for their maintenance. Furthermore, the legal entities typically have multiple certificates from multiple organizations, making it very difficult to keep various records globally. In addition, these certificates lack a link between each other, so tracking and managing are becoming a painstaking task. In most cases, the reference data for a particular data, such as the name, address, and legal form, varies from issuer to issuer and how they use the local language. This requires manual checks for 1) certificates to ensure they match the counterparty’s representation of the organization’s internal database. 2) certificates to make sure they are updated and have current information.
The second point brings up another issue. If the circumstances of the certificate holder change, the digital certificates do not change. For instance, if they change their address, telephone number, or any other vitals, the changes will not be reflected on their certificates. If you want to update the information, the whole process will start again as the legacy certificates cannot be just altered, they are revoked, and new certificates are issued. This is not the general practice, and it only happens in rare cases. And if no changes could be made, outdated information will be available on the live certificate.
In such cases, the entity does what it feels like as the organizations do not offer new certificates. Instead, they let the certificates carry old information until it expires, and then only further information is updated. This is the general way most organizations deal with such situations. You might call it a deliberate act or immaterial act, as the information about the organization contained in the certificate is rarely updated. However, suppose you look at the broader picture. In that case, the renewal of the certificate and update of data on the expiration date causes inconsistency in the system and affects the overall idea behind the digital certificates. As a result, the LEI code renewals are not provided, and the trust remains undermined, and the information remains different in different locations.
The problem of maintenance and managing different types of information between other businesses remains an issue. Furthermore, the use of digital certificates intensifies the problem when used on a larger scale, such as business contracts, business transactions, supply chain networks, onboarding clients, regulatory fitting, import and export trade, and many more. Due to the mentioned issues, the entities require an urgent fix to the problems being faced by them. In addition, they need a way to ensure the information obtained using the digital certificates is reliable and updated.
A Remarkable Solution
The best solution for the issue mentioned above is integrating the LEI code into the digital certificates when the certificate is being issued. The LEI code, a 20 digit character and alpha-numeric principle based on ISO standard 17442, is connected to the critical reformation to identify the entity as unique and unambiguous. The LEI code contains the ownership of the entity, information regarding the basic details of the entity and the answers to the questions such as who is the owner and who owns what. This information is used for operational purposes.
If the LEI codes are integrated into the digital certificates, they will act as the common link between the two. This is the urgent requirement of the hour. This will make it easy for all the certificates to be linked together and all the records to be identified easily. It can determine which certifications are updated, clear up the variances, identify the organization and the entities. This allows trustworthy transactions, thereby making it easier for everyone to take part in the global market.