Finbox, a Bengaluru and Gurugram-based fintech startup, has become one of the first companies to go live with an account aggregator (AA) ecosystem, deeply integrated into its user journey. Through its partnership with FinVu, an RBI-licensed NBFC account aggregator, Finbox has further strengthened and consolidated its credit intelligence portfolio which already boasts of a robust risk assessment and alternative data decision engine. Eight banks including HDFC Bank, ICICI Bank and Axis Bank have joined the AA framework. The AA framework allows financial institutions to directly share consumer details with other financial service providers, such as lenders or money managers, with the consent of the customer. Since the data is shared directly, the risk of fake documents is reduced.
By empowering its stack with the AA framework, Finbox will be able to more accurately assess 1 million new loan applicants over the next quarter, a release issued by the company said. Over the next year, Finbox aims to target an additional 6 million potential borrowers using its AA ecosystem, in addition to its existing network of partners and lenders.
The AA Framework is set to bring convenience to both retail and business borrowers, who are moving towards digital loans through apps and fintech portals. This enables easy sharing of data, which is a major pain point for the lending industry, the release said. Industry data shows that 70 per cent of potential borrowers seeking loans would skip the digital lending journey when asked to upload their bank details or provide scanned copies of the same. Huh. Through its AA offering, Finbox aims to reduce the drop-off rate to less than 10%.
“The AA Framework promises to bring about a paradigm shift in India’s credit sector. This will allow lenders to assess a wider selection of data points to determine a borrower’s creditworthiness, thereby bringing under-banked sections of the population into the fold of formal lending. Furthermore, the ease and security with which it enables data sharing will give a major boost to the lending industry, with borrowers more willing to share their data with financial institutions,” said Rajat Deshpande, Chief Executive Officer and CEO of Finbox. co-founder said.
“We are excited to be working with Finbox to enable an account aggregator framework on their platform. Lending is, at its core, a transaction that is based on trust. And through this partnership, Finbox is consent-based. is set to strengthen and optimize the process of data sharing – a win-win for the company and the borrowers. Finvu is proud to partner and enable a more cutting-edge technology use case in the fintech space,” said Munish Bhatia, Co -Founder, said Finvu.
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