On 2nd September 2021, eight major banks, including Axis Bank and HDFC Bank, came together and joined hands to initiate the launch of new account aggregation in India. This is revolutionizing the financial data sharing model and fetching the consumer’s information to view the data on one page in a simpler way.
However, what is Account aggregation India and what is the purpose behind its launch? Let’s discuss this in detail through this article.
What are Account Aggregators?
According to the Reserve Bank of India, account aggregation India is the non-banking financial institution who has secured the essential licenses from RBI, required to retrieve and collect financial information about their customers. Furthermore, they have the access to share financial information with the institutions on a consensual basis and allow the users to have better control over their financial insights.
The Account aggregation India concept is drafted to reduce financial fraud and allow consumers to manage their financial information. On 2nd September 2021, RBI also announced that India would be the home of several account aggregators by leveraging modern fintech technology.
How Does Account Aggregation India Work?
Basically, all account aggregators in India share a three-tier structure such as: –
- FIP (Financial Information Provider)
- Account aggregator
- FIU (Financial Information User)
Here, the financial information provider is responsible for collecting and storing significant customer data. A FIP can be either a banking or non-banking financial institution such as the income tax department or Insurance Regulatory and Development Authority (IRDA). On the other hand, a financial information user is responsible for consuming the information provided by FIP to assess the eligibility of the end consumer and further the goal of financial inclusion.
In the middle of FIP and FIU, account aggregators are responsible for facilitating the smooth flow of information between both parties. It also allows the customer control over the data, that is, choosing which financial institution the data should be shared with and for how long.
Account Aggregation India is revolutionizing the BFSI (Banking, Financial Services and Insurance) Sector
Banks, regulators, and corporates have all been collecting massive amounts of consumer data over the years. However, this data lies behind opaque silos, which the consumers can neither adequately protect nor utilize. The DEPA protocol (Data Empowerment and Protection Architecture) is India’s account aggregation-based platform that creates a data-driven economy by exceeding the concept of open banking. By allowing consumers to securely and easily share their financial data with banks, businesses, and other service providers, DEPA enables a more efficient and streamlined economy from which all parties can benefit. Through the DEPA portal, the BFSI’s in India can bring transparency to the data. The users in India will have the ability and power to share their data securely, quickly and conveniently, which results in numerous benefits for consumers and businesses as well.
The process of intelligent data aggregation, cleansing, and augmentation will make it easier for customers to see and access their financial information while also providing them with more control. The data that is typically hidden behind silos will be more accessible to all parties involved, thanks to the AA interface. This will result in a better experience for customers overall.
Is Account Aggregation India process safe?
Yes, it is completely safe and secure. Plus, the convenient and safe process is claimed by RBI and the FSDC (Financial Stability and Development Council). It leverages modern fintech technology to prevent cyber-attacks, fraud and privacy violations.
How does Account aggregation in India benefit the Users?
Now that we understand what account aggregators are and their working model. Let’s check out how account aggregation as a service will benefit the end-user customer. Some of them include: –
- Processing Time is Reduced
If you have ever tried to open a new bank account or have closed your previous one, then we are sure that you might be frustrated with the process. Standing in the long queues and extended processing time of institutions just for a small request is also quite depressing and frustrating. For this reason, account aggregation India’s purpose is not only to eliminate the need for customers to stand in the long queue or to step out of the house for financial work but also to reduce the processing times required by the financial institution for fulfilling small requests. The account aggregators ensure the smooth and secure flow of information between the financial institutions and users, which will save both stakeholders time and money.
- Increased Control Over Financial Data
Before the existence of account aggregation in India, financial and non-banking institutions used to collect and store confidential customer financial information without any oversight authority. These institutions would often act as owners of this data instead of custodians. This has left customers with no way of accessing their own information. However, with the introduction of the account aggregation concept in India, RBI has designed it with the purpose of empowering the customer with access and control over their financial information and providing them with the right to share their confidential data with whomever and for how long. This does not only provide rightful ownership but also aims to ease the process of enduring future data privacy and security regulations.
- Increased Financial Inclusion
The financial information providers across the country have streamlined access to the managed wealth information of the customers. This not only helps the companies to target the right customers but also verifies their eligibility for financial instruments, thereby promoting the goal of increased financial inclusion.
Final Takeaway
The RBI is hailing the launch of account aggregation India and its services as a massive success. Anumati, as the prime account aggregator licensed by RBI, has a great conceptualization of the service, truly with the potential to revolutionize and redefine the future of financial services in India. They allow financial data sharing quick and securely. It makes sure that your confidential data is not shared or nobody gets access to it without your consent. You can download this app either from the Play store or Appstore to learn more about its fascinating features and services. Try it out now!
