What is an Account Aggregator?
Account Aggregator (AA) is a type of entity regulated by RBI (with NBFC-AA license) that enables an individual to securely and digitally share information from one financial institution and with any other regulated financial institution in AA helps to share. Network. Data cannot be shared without the consent of the individual. There will be multiple account aggregators that an individual can choose from. Account aggregators replace the lengthy terms and conditions form of ‘blank check’ acceptance with a fine-grained, step-by-step permission and control for each use of your data.
How will the new account aggregator network improve the financial life of an average person?
India’s financial system today involves many hassles for consumers – sharing physical signed and scanned copies of bank statements, running around to get documents notarized or stamped, or giving their financial history to a third party. Sharing your personal username and password for The account aggregator network will replace all this with a simple, mobile-based, simple and secure digital data access and sharing process. This will create opportunities for new types of services such as new types of loans.
The individual’s bank just needs to be connected to the account aggregator network. Eight banks are already in place- four are already sharing data on consent basis (Axis Bank, ICICI Bank, HDFC Bank and IndusInd Bank) and four are going to be enabled soon (State Bank of India, Kotak Mahindra Bank , IDFC First Bank, and Federal Bank).
How is the account aggregator network different from platforms like Aadhaar eKYC data sharing, credit bureau data sharing and CKYC?
Aadhaar eKYC and CKYC allow sharing of four ‘identity’ data fields only for KYC purposes (for example, name, address, gender, etc.). Similarly, credit bureau data only shows credit history and/or credit score. The account aggregator network allows sharing of transaction data or bank details from savings/deposit/current accounts.
What type of data can be shared?
Today, banking transaction data is available for sharing (for example, bank details from a current or savings account) across banks that have gone live on the network. Gradually, the AA framework will make all financial data available for sharing, including tax data, pension data, securities data (mutual funds and brokerages), and insurance data available to consumers. It will also expand beyond the financial sector to make healthcare and telecommunications data accessible to the individual through AA.
Can AAs view or ‘collect’ personal data? Is data sharing secure?
Account aggregators cannot view the data; They move it from one financial institution to another only on the instructions and consent of an individual. Contrary to the name, they cannot ‘collect’ your data. AA’s are not like technology companies that collect your data and create detailed profiles of you. The data aa share is encrypted by the sender and can only be decrypted by the recipient. The use of technology like end-to-end encryption and ‘digital signature’ makes the process more secure than sharing paper documents.
Can a consumer decide they don’t want to share data?
Yes. It is completely voluntary for consumers to register with AA. If the consumer’s bank is part of the AA network, the individual can choose to register on the AA, choose which accounts they wish to link, and transfer their data from one of their accounts to a new one for a particular purpose. The lender or financial institution can share it. The stage of giving ‘Consent’ through any one of the AA’s. A subscriber may at any time decline his/her consent to share the request. Even if a consumer has agreed to share data in a recurring manner over a period of time (for example, during the loan term), they may revoke their consent later.
If a consumer has shared their data with an organization once, for how long can they use it?
The exact time period of the recipient institution will be shown to the consumer at the time of obtaining their consent to share the data.
How can a customer get registered with AA?
You can register with AA through their app or website. AA will provide a handle (like a username) that can be used during the consent process. Today, there are four apps available for download (Finvu, OneMoney, CAMS Finserv, and NADL) that have operational licenses to be AAs. Three more apps have got in-principle approval from RBI (PhonePe, Yodlee, and Parfios) and they are likely to launch the apps soon.
Does the customer need to register with each AA?
No, the customer can register with any AA to access data from any bank on the network.
Does the customer need to pay AA to use this facility?
It will depend on AA. Some AAs may be free because they are charging a service fee from financial institutions. Some may charge a small user fee.
What new services can the customer access if the customer’s bank has joined the AA network of data sharing?
The two major services that will be improved for an individual are access to credit and wealth management. If a customer wants to get a small business or personal loan today, there are a number of documents that need to be shared with the lender. It is a cumbersome and manual process today, which affects the time taken to get the loan and access the loan. Similarly, money management today is difficult because data is stored in many different locations and cannot be easily brought together for analysis.
Through account aggregators, a company can quickly and cheaply access tamper-proof, secure data, and fast-track the loan appraisal process for customers. Also, a customer may be able to access the loan without physical collateral, by sharing reliable information on future invoices or cash flows directly from a government system like GST or Government e Marketplace (GeM).
Source: Ministry of Finance
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