Account Aggregator is a data empowerment platform that is
expected to revolutionize credit, insurance, and investment by making it more
effective and efficient information asymmetry. Like the game-changing payment
platform UPI, the account aggregator platform will be the world's cutting-edge digital financial infrastructure
that has brought structural change to the financial data
landscape.
What is an Account Aggregator?
An account aggregator rbi is a specialized entity, often a
non-banking financial company, tasked with the role of securely gathering and
consolidating financial information from various sources on behalf of an
individual or business. This data can include details from bank accounts,
mutual funds, insurance policies, pension funds, and more.
What are the functions of an account aggregator platform?
Data Collection and Organization:
Collects diverse financial data from multiple institutions
Organizes the data comprehensively for unified access
Unified Presentation:
Presents the compiled data in a unified format
Accessible to authorized users for comprehensive financial
oversight
Secure Information Sharing:
Enables secure digital sharing across financial institutions
in the AA network
Requires explicit customer consent for data sharing
Multiple Account Aggregators:
Offers a choice of Account Aggregators for customers
Customers can select from various AA options
Data Handling Limitations:
Account Aggregators cannot read, store, or process digitally
signed or encrypted customer information
Cannot create profiles or store collected data contrary to
the name
Encryption and Data Sharing Process:
Sender encrypts the shared data for secure transmission
Ensures the confidentiality and security of shared
information
What is the necessity of Account Aggregator Framework?
Data Sharing Challenges:
- Customers generate vast amounts of data, but securely
sharing it with service providers requires effort.
- Lack of control over who accesses the data, how it's used,
and for what purpose.
Enhancing Digital Adoption:
- Only a small percentage of retail/SME loans are digital.
- Framework facilitates standardized data sharing to boost
digital transactions and resolve trust issues.
Fragmented Customer Information:
- Customer data is scattered across banks, lenders,
insurers, government entities, etc.
- Account aggregators consolidate and enable secure sharing
of data among Financial Information Users (FIUs) from Financial Service
Providers (FIPs).
Streamlined Access to Financial Services:
- Eliminates the need for manual document collection for
account openings, tax filings, loans, etc.
- Secure and compliant data sharing gives
individuals/businesses control over their data, accelerating access to
financial products.
Cost-Efficient Information Access:
- Offers low-cost access to information while maintaining
security and compliance standards.
- Provides faster and more affordable access to financial
services and products.
How does it work?
FIP – Financial Information Providers are data fiduciaries
that hold customer information.
FIU – Financial Information User – uses data from a FIP to
provide various financial services to customers. A FIU is a lending bank or
asset manager that wants to access borrower information to determine whether
the borrower is eligible for a loan.
Secure and Compliant Data Transfer - AAs enable the secure,
compliant (while protecting user privacy) transfer of financial information
relating to various accounts such as bank deposits, equity, mutual funds and
pension funds that require access to this information.
The Revenue model for AA
AA provides services to retrieve or collect financial information about its customers' financial assets. AAs will charge financial institutions a service fee.
Players that benefit from the Account Aggregator System
MSMEs and New Borrowers:
- Lack access to formal credit due to unorganized financial
records.
- Enables access to credit based on verified information
like GST invoices, bank statements, and security data.
- Reduces risk of tampering and fraud, fostering financial
inclusion.
Lenders:
- Offer credit across the spectrum based on verified data.
- Lower customer acquisition costs, especially with smaller
customers.
Raking Compliance:
- Monitors customer financial health and profitability.
- Facilitates debt consolidation.
- Enables cross-selling of products like deposits, wealth
management, and insurance, enhancing operational efficiencies.
Retail Users:
- Access to better lending and deposit rates.
- Availability of specific financial products.
- Offers a consolidated view of financial accounts, spending
patterns, and enhanced control over financial matters.
This breakdown highlights the key beneficiaries segmented
into MSMEs, lenders, compliance operations, and retail users, emphasizing the
advantages and opportunities that the account aggregator platform brings to
each sector.
On what criteria can AAs distinguish themselves?
Operational Presence:
- Launch and operational licenses for Account Aggregator
Systems (AAS).
- Potential for more AAS entries due to an extensive and
untapped market.
- Existing AAS processing a significant number of
transactions monthly across multiple lenders.
Market Accessibility:
- Opportunity for users to choose from multiple AAS
providers.
- Differentiation in user experience, app interface, and
data flow among AAS.
- Functional parity across AAS platforms, but with varied
user experiences.
Key Differentiators:
- Focus on user experience, emphasizing ease of use and
navigation.
- Speed, stability, and scalability are pivotal aspects setting
AAS apart.
Customer Onboarding:
- Registration through an app or website, providing a unique
handle (e.g., username) for the consent process.
This overview highlights the competitive landscape of AAS
without mentioning specific company names, emphasizing the market potential,
differentiation factors, and customer onboarding methods among Account
Aggregator Systems.
How does an AA differ from a credit bureau; Will it be complementary or competitive?
AA functions differently than credit bureaus. AAs provide
infrastructure for sharing information about customers' financial
assets.
On the other hand the bureau shares data on the customer's
liability (showing loan history and/or credit score).
So, the datasets that bureaus deal with and how account aggregator rbi facilitates them
are very different.
Summary
In the evolving financial management landscape, account
aggregator platforms mandated by the RBI represent a seismic shift. In
compliance with RBI guidelines, these platforms revolutionize how financial
data is managed and accessed. Within this transformative sphere, Anumati
emerges as a pioneering force, reshaping the future of account aggregation.
Beyond mere aggregation, Anumati prioritizes user trust, data security, and
intuitive interfaces, empowering users to navigate their financial realms
confidently.
