The global LEI project aims to ensure that every counterparty in a financial transaction is issued a unique code so that those transactions can be fully tracked across borders.

The McKinsey study, conducted on behalf of the Global Legal Entity Identifier Foundation (Gleif), estimates that annual savings in investment banking would include at least 10 percent of total operational costs for onboarding clients and trading processing through the use of the LEI.

The paper also identified three new use cases for the coding standard - capital markets, commercial transactions and the extension of commercial credit.

The first LEIs were issued in 2012 and by the end of January 2017 487,000 had been registered. But progress has stalled: in 2016 there were 64,000 issued but 76,000 lapsed.

According to a research note from Financial InterGroup, this failure to renew already issued LEIs may present significant problems.

The issue is likely to get worse in Europe, where from 2018 MiFID II will require all clients who trade financial products on organised markets throughout the EU to have an LEI - but the mandate allows lapsed LEIs to be used in financial transaction reporting.

Gleif CEO, Stephan Wolf, comments: “We hope this paper will broaden the understanding of LEIs and spark further debate about their cost saving and efficiency benefits. The new research clearly illustrates the value of the LEI, but its broad application and adoption depends on the creation of a strong network of advocates. We are therefore actively encouraging organisations, especially large corporations, small businesses and their banking institutions to work together to discuss and consider the adoption of LEIs in day to day processes.”