Cybersecurity does not start with technology, but with trust
Cybersecurity is often described as a technical challenge. Firewalls, access controls, monitoring systems, and incident response tools tend to dominate the discussion. While these measures are essential, they are not where cybersecurity truly begins. In practice, it starts much earlier — at the moment an organisation decides who it does business with.
Modern business is deeply interconnected. Companies rely on external service providers, vendors, financial intermediaries, and partners across borders. Each connection creates operational value, but also introduces risk. When a business partner’s identity is unclear, outdated, or difficult to verify, it becomes impossible to assess that risk reliably.
Cybersecurity is built on trust. And trust begins with knowing who you are actually dealing with.
Why technical security alone is no longer sufficient
Technical security controls are designed to protect systems, but they assume that access is granted to the right entities. If access is given to the wrong organisation — or to an organisation whose background is poorly understood — even strong technical controls may fail to prevent harm.
Many serious cybersecurity incidents originate not from direct system breaches, but from the misuse of trusted relationships. When a threat actor operates through a seemingly legitimate partner, supplier, or contractor, technical defences become far less effective.
This shifts the core question from “How do we protect our systems?” to “Who should we trust with access in the first place?”
Third-party risk as a central cybersecurity issue
A growing share of cybersecurity and operational risk comes from third parties. These may include suppliers, IT service providers, payment processors, logistics partners, or outsourced support functions. Each third party becomes part of the organisation’s extended digital perimeter.
Third-party risk is not limited to software vulnerabilities or insecure infrastructure. It also includes:
- unclear legal status
- opaque ownership structures
- inconsistent or outdated registry data
- difficulty assigning accountability
To manage these risks effectively, organisations rely on structured verification processes, including KYC and business verification
When an organisation cannot clearly identify its counterparties, both security and compliance risks increase significantly.
Regulatory direction: risk-based and identity-focused
Across jurisdictions, regulatory frameworks are moving toward a more risk-based and identity-focused approach to cybersecurity. Rather than prescribing specific technical controls, regulators increasingly expect organisations to understand and manage risks across their entire operating environment, including suppliers and service providers.
In the European Union, this shift is clearly reflected in the NIS2 Directive and cybersecurity requirements
For the official legal framework, see the NIS2 Directive
While frameworks differ globally, the underlying expectation is consistent: organisations must be able to demonstrate that they know who they rely on and how those relationships affect their security posture.
Business identity as the foundation of cybersecurity
When cybersecurity is viewed more broadly, business identity becomes a core concept. A globally standardised approach to business identification is provided by the Legal Entity Identifier (LEI)
Business identity goes far beyond a company name or registration number. It includes:
- legal existence and status
- official registry information
- ownership and control structures
- relationships to other legal entities
- data accuracy and timeliness
Without a clear and standardised business identity, reliable risk assessment becomes difficult. This challenge is amplified in cross-border environments, where data is sourced from multiple national registries using different formats and standards.
In digital and automated environments, business identity must be unambiguous, machine-readable, and internationally consistent to support effective risk management.
The small business perspective: becoming a trusted partner
Discussions about cybersecurity and regulation often focus on large organisations. However, the same dynamics strongly affect small and medium-sized enterprises that want to work with corporates, financial institutions, or international clients.
For smaller businesses, the main barrier is often not product quality or technical capability, but trust. Large organisations must assess risk for every new partner, yet they cannot do this manually and in depth for every potential supplier. As a result, they rely on standards, signals, and structured data to decide which relationships are worth exploring further.
Many cooperation opportunities stall not because the offer lacks value, but because the counterparty cannot be quickly and clearly understood.
LEI as a trust and onboarding accelerator
This is where the Legal Entity Identifier (LEI) becomes relevant. The LEI is a global standard designed to uniquely identify legal entities and link them to verified reference data from authoritative sources.
For smaller companies, an LEI is not only a regulatory requirement in certain contexts. It is a practical tool that allows them to present themselves in a way that aligns with how large organisations manage risk.
An LEI signals that:
- the entity is uniquely identifiable
- its core reference data is linked to official registries
- ownership information is declared in a standardised form
- the data can be used in automated and cross-border processes
From the perspective of a large organisation, this reduces initial uncertainty and speeds up the decision on whether a potential partnership can move forward. An LEI does not guarantee cooperation, nor does it replace due diligence, but it helps a business become understandable and assessable much earlier in the process.
Cybersecurity as a shared responsibility across the supply chain
Cybersecurity is not only the responsibility of large buyers or central platforms. Every participant in a supply chain contributes to the overall risk profile. When one party cannot clearly present its identity or keep its data up to date, the entire chain becomes more vulnerable.
For this reason, smaller businesses also benefit from adopting standards that make them easier to verify and integrate into their partners’ risk management frameworks — often before such expectations are formally required.
Continuous accuracy as a prerequisite for trust
Neither cybersecurity nor business identity is static. Companies change, ownership structures evolve, and data becomes outdated. Identity checks performed only once quickly lose their value.
Effective risk management depends on identity information that remains accurate and current over time. This ongoing reliability supports not only compliance, but also long-term trust between business partners.
Conclusion
Cybersecurity does not begin in the server room, nor does it end with software. It begins with understanding who you are doing business with and on what basis that relationship exists.
Technical controls remain essential, but without a clear, standardised, and up-to-date business identity, they are incomplete. In today’s interconnected and regulated economy, knowing your counterparties is one of the most important security measures available.
The LEI provides a shared, global framework that helps both large and small organisations build trust, improve transparency, and collaborate more effectively across borders.