There is some major positive good news for the KERI & ACDC ecosystem. The European Banking Authority announced on LinkedIn the EBA Pillar 3 data hub which is built on KERI & ACDC. The Pillar 3 data hub uses the vLEI system developed by GLEIF, the Global Legal Entity Identifier Foundation.

vLEI System Architecture Diagram:

What this means

This means that around 6000 financial institutions in the EU will now be required to use the EBA Pillar 3 data hub, and by extension KERI & ACDC, for their financial reporting. You can read more in their website announcement and the linked report PDF.

The important parts include pages 50-52, specifically the Garner analysis in section 6.3.128:

• EBA had Gartner analyze KERI & ACDC
• found ” that there are no comparably efficient alternative solutions globally”

And section 6.4.130 Conclusion:

• “vLEI effectively meets…Pillar 3 reporting requirements…perceived as a low-risk project overall…significant opportunity to enhance integrity of reporting processes”

A number of advantages and risks were identified with the paper saying

The automation of identity verification and related processes through the vLEI could also offer numerous potential advantages for both Financial Institutions and other Regulators in the EU financial market

https://www.eba.europa.eu/sites/default/files/2023-12/d5b13b4d-a9dc-4680-8b7c-0a3a4c694fac/Discussion%20paper%20on%20Pillar3%20data%20hub.pdf

Potential Advantages:

• For Financial Institutions
  • Non-repudiable identification
    • This means once you say something with KERI you can’t un-say it, as in you can’t change your story without getting caught
  • Operational efficiency: unified digital format
  • Enhanced products and services: trusted information enables risk management, customer service, and enhanced online experience
• For Supervisors/Regulators
  • Enhanced Trust: simplify both validation of regulatory reports and authorized sign off
  • Comprehensive Entity Overview: transparent, aggregated view of legal entities and hierarchies
  • Standardization of Data Processes: smarter, more cost-effective, reliable data workflows

Risks:

• Development of ecosystem
  • Due to ecosystem novelty there is only one QVI right now (Provenant),
    • Support is needed from GLEIF to grow the population of QVIs, incentive structure, and ecosystem orchestration
  • Ensure adequate support to institutions
    • End-user applications bank wallet
    • Wallet for reporting institutions
    • Compatibility with eIDAS 2.0 framework
    • User-friendly applications for digital signatures, key management, and logging services
  • Market’s recognition of benefits offered by vLEI
    • Pillar 3 reporting requirement could trigger a “snowball effect” to catalyze market recognition of vLEI benefits.

This is an exciting development in the KERI space that this blog will continue to track.

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Tagged as: acdc banking eba european-banking-authority finance fintech KERI pillar-3 pillar-3 vlei

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