The financial industry is bustling with the buildup of Account Aggregator’s (AA) innovative potential. Its framework will have a life-changing impact on the financial or monetary service ecosystem and could turn up as the subsequent UPI moment for lending. In India, Account Aggregator is likely to transform wealth management, lending, and fiscal planning in the next few years.

Customers’ monetary data, such as mutual fund investments, bank accounts, pension funds, and insurance, is extended across different banks and fiscal entities. Every service provider has diverse processes, logins, and interfaces for accessing account data.

Account aggregation targets resolving this problem by exemplifying customers’ fiscal information from different sources under a single roof. It aggregates or combines data from financial institution providers (FIPs) and provides it to Financial Information Users (FIUs). This will let lending companies better check their customers’ reliability and de-risk their loan accounts by foreseeing non-performing assets. This leads us to the AA framework.

What is an Account Aggregator Framework?

An Account Aggregator in India is an online platform that assists you in safely sharing your monetary information from your account with other fiscal institutions that require this data to serve you. It performs as an online passage to transfer user’s monetary details; moreover, it does not regulate or store this information. In fact, AA is not able to see the data as the data that goes through it is encoded. It doesn’t store any user’s economical details, thus stopping prospective leakage and wrong use by the aggregator.

Who Are the Key Players in the Ecosystem, and How Do They Work?

A Financial Information Provider (FIP) is a standardised and authorised entity that keeps customers’ monetary information and allocates it to FIU via an AA. These entities include banks, banking organisations, non-banking financial corporations, asset management organisations, depository, depository entrants, insurance firms, pension funds, insurance repositories, and other entities that the bank may verify on a timely basis for the ideas of these directions.

An FIU is a Financial Information User, an entity listed with and governed by any commercial sector manager. An FIU uses the data from an FIP to offer various services to the final customer.

TSPs, or Technology Service Providers, work with FIPs and FIUs to provide AA-facilitated products and services. Employing the AA framework, they create modules to get a customer’s fiscal information (involving bank statement data) straight from the banks with the help of APIs.

What is the Difference Between FIU and FIP?

To better know the difference between these two entities, let’s suppose you are applying for a loan with Bank A. Bank A needs your account data, like your savings bank account statement kept with Bank B, to assess your loan application and check your creditworthiness. In this situation, Bank B functions as the FIP, and Bank A is the FIU. The AA system involves banks, insurance companies, mutual fund companies, asset or wealth management organisations, pension funds, and regulatory authorities.

As expected, the customer selects what data to allocate and with whom, and none of this information can change hands without specific permission, which can be revoked at any time. The framework can prospectively regularise economic services dispersal and make it simpler to assess and help new-to-credit and underbanked debtors or borrowers.

Advantages of Account Aggregator Network

Here are some of the most important advantages of the network:

1. Quicker Loan Processing

With the help of this network, bankers or lenders can now quickly access a client’s monetary background. This information assists in processing loan applications quickly by observing compliance processes. This is accomplished by checking the customer’s permitted fiscal data, which is distributed in the AA framework.

2. Reduced Paperwork

If a customer’s fiscal institution is listed in the aggregator network, the customer does not need to complete the KYC procedure throughout the application. They only need to permit the aggregator to extract all their data.

3. Safe Data Processing

The RBI has fixed stern data allocation and privacy regulations for the aggregator framework. All details shared by the environment will have safe digital signatures and be completely encrypted. When sending from the origin bank to the FIU that wishes to offer some service to the customer, the data goes through many layers of encoding and verification. The framework of India’s Account Aggregator is not able to access anything because all data processed via it is encrypted and can only be handled by the FIU that asked for the data. 

4. Secured Client Details

Manual tracking of fiscal data is very difficult and time-consuming, as collecting a borrower’s account details from various monetary organisations can be a very chaotic task. The aggregator network plays an essential role in this procedure by aggregating large sums of data. The data is assigned to a specific FIU when they ask for it, and the customer gives their approval and then allocates it.

5. Easy Dashboard     

Account aggregators let clients check their scores from the fiscal services of many organisations on a single dashboard. With the customer’s permission, aggregators can allocate particular monetary data to NBFCs and banks. Debtors have complete control over their information and can fix a timeline for how long banks can go through their data.

6. Simple Onboarding

The network will fully change the manual procedure of data gathering and updating with online and fast data processing. This saves enough time and resources for both customers and banks, thus enhancing coordination among them.

In Conclusion

Account Aggregator in India aims to make credit risk assessment simpler, affordable, and accessible. The framework will assure the accessibility of credit on an extended scale. As more customers join this system, the latest use cases will come out. 

If you are looking for the best platform for account data aggregation, then Anumati, as an RBI aggregator, lets you aggregate and see all your assets under a single platform. This platform allows the easy and secure transfer of your data between financial organisations like banks, insurance companies, mutual fund companies, or different regulatory authorities. This platform accomplishes this by providing users with a safe end-to-end encrypted data-allocation platform that fetches and provides monetary information from one financial unit to another without ever interpreting, storing, or utilising it.

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