In a boost to the account aggregator (AA) ecosystem, all major public sector banks (PSBs) and private sector banks in the country have joined the platform, which has brought more than one billion accounts to the AA framework, according to a tweet by Sahamati, a non-profit collective of the framework.
“1.1 billion accounts, including all major public and private bank accounts, are now live on India’s #AccountAggregator. A Seminal moment for the world’s largest #OpenBanking ecosystem! This will unleash India’s next wave of #financialinclusion & #fintech innovation! #openFinance,” Sahamati has said in a tweet.
1.1 Billion accounts, including all major public and private bank accounts, are now live on India’s #AccountAggregator. A Seminal moment for the world’s largest #OpenBanking ecosystem! This will unleash India’s next wave of #financialinclusion & #fintech innovation! #openFinance pic.twitter.com/9RKErVbZKn
— Sahamati (@sahamati) August 2, 2022
In early July, Finance minister Nirmala Sitharaman had held a meeting with heads of PSBs and regional rural banks. During the meeting to review operational and governance reforms of regional lenders, the finance minister had instructed public sector banks to get on board the AA platform by the end of July.
What Is Account Aggregator Framework?
It is a framework for data sharing between financial institutions like banks, pension funds, insurance companies and assets management companies. Under this, account aggregators (AAs) use technology for simple and secure exchange of the data between the institutions. With AAs, you can use your financial data to access a vast array of financial services for your personal or business needs.
Under the framework, data will be shared between financial information providers (FIPs) and financial information users (FIUs). FIPs are institutions that will collect data from customers and FIUs are the ones that will use this. FIP and FIU may be the same entity also. For instance, if you have opened an account at State Bank of India, your data like transactions, credit discipline will be collected by SBI. This way, it’s working as FIP. However, if you seek loan from SBI, it will use data to know your creditworthiness, etc. This way, it is working as FIU.
The Reserve Bank of India (RBI) will provide licence to AAs for enabling the flow of data between financial information providers (FIPs) and financial information users (FIUs). The companies that have already got the licence include NESL Asset Data, Perfios Account Aggregation Services, Finsec AA Solutions, CAMFinServ, Finvu and Yodlee Finsoft.
FIUs and FIPs must be registered with their respective sectoral regulators, such as the RBI, Insurance Regulatory and Development Authority (IRDAI), Securities and Exchange Board of India (Sebi), Pension Fund Regulatory and Development Authority (PFRDA).
How Will AA Help Lenders And Customers?
As UPI transformed the way you pay, AA can make financial services like loans and credit facilities much more seamless and accessible for everyone using the existing digital infrastructure. AA makes it effortless for financial service providers to gather data. It allows faster processing, and quicker access to products or services. With the entire financial profile at one place, service providers can gauge your needs in a better way.
Information for each synced account is up-to-date, and available online reducing margin for errors.
Will It Affect Your Data Privacy?
No. You have to give consent on what data can be shared, which means AAs cannot share your data without your consent. AA does not store or process your data. All your financial data is encrypted with the AA. You can give or revoke access to your active consent anytime.