Account aggregator: Know all about India's financial data-sharing system - Hindustan Times
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Account aggregator: Know all about India's financial data-sharing system

Written by Susmita Pakrasi | Edited by Meenakshi Ray, Hindustan Times, New Delhi
Sep 10, 2021 12:25 PM IST

An Account Aggregator (AA) is an RBI regulated entity, which helps an individual securely and digitally access and share information from one financial institution they have an account with any other regulated financial institution in the AA network.

The Reserve Bank of India (RBI) launched the Account Aggregator (AA) network, a financial data-sharing system last week. The Union finance ministry has said that this system can revolutionise investing and credit, giving millions of consumers greater access to their financial records and expanding the potential pool of customers for lenders and financial technology companies. It also empowers the individual with control over their personal financial data, the ministry said in a press release on Friday.

Account Aggregator replaces the long terms and conditions form of ‘blank cheque’ acceptance with a granular, step by step permission and control for each use of the customer data.(File)
Account Aggregator replaces the long terms and conditions form of ‘blank cheque’ acceptance with a granular, step by step permission and control for each use of the customer data.(File)

It further stated that this is the first step towards bringing open banking in the nation and empowering millions of customers to digitally access and share their financial data across institutions in an efficient and secure manner.

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What is an account aggregator?

An Account Aggregator (AA) is an RBI regulated entity, which helps an individual securely and digitally access and share information from one financial institution they have an account with any other regulated financial institution in the AA network. However, the data cannot be shared without the consent of the individual. Account Aggregator replaces the long terms and conditions form of ‘blank cheque’ acceptance with a granular, step by step permission and control for each use of the customer data.

How will the account aggregator network help?

The account aggregator network would improve a person's financial life with a mobile-based, simple and safe digital data access and sharing process. This will create opportunities for new kinds of services. The customer's bank needs to join the Account Aggregator network. Eight banks already have—Axis Bank, ICICI Bank, HDFC Bank, and IndusInd Bank are already sharing data based on consent and the State Bank of India, Kotak Mahindra Bank, IDFC First Bank and Federal Bank will join shortly.

How is the account aggregator different?

Aadhaar eKYC and CKYC only allow sharing of four identity data fields for KYC purposes (eg name, address, gender, etc). Similarly, credit bureau data only shows loan history and/or a credit score. The Account Aggregator network allows sharing of transaction data or bank statements from savings/deposit/current accounts.

How can a customer get registered with an AA?

One can register with an AA through their app or website. The AA will provide a handle (like username) that can be used during the consent process. Four apps are available for download (Finvu, OneMoney, CAMS Finserv, and NADL) with operational licenses to be AAs. Three more apps have received in-principle approval from the RBI (PhonePe, Yodlee, and Perfios) and maybe launching soon. The ministry said that a customer can register with any AA to access data from any bank on the network.

Does a customer need to pay the AA for using this facility?

The finance ministry said that this will depend on the AA if a customer needs to pay the AA for using this facility. Some AAs may be free because they are charging a service fee to financial institutions. Some may charge a small user fee.

What new services can customers access if their bank has joined the AA network?

The two key services that will be improved for an individual is access to loans and access to money management, the finance ministry said. Through the account aggregator, a company can access tamper-proof secure data quickly and cheaply and fast track the loan evaluation process so that a customer can get a loan. Also, a customer may be able to access a loan without physical collateral, by sharing trusted information on a future invoice or cash flow directly from a government system like Goods and Services Tax (GST) or Government e-Marketplace (GeM).

What kind of data can be shared?

The AA framework will make all financial data available for sharing, including tax data, pensions data, securities data (mutual funds and brokerage), and insurance data will be available to consumers. It will also expand beyond the financial sector to allow healthcare and telecom data to be accessible to the individual via AA.

Is data sharing secure on AAs?

The finance ministry said that the Account Aggregators cannot see the data; they merely take it from one financial institution to another based on an individual's direction and consent. Contrary to the name, they cannot 'aggregate' your data. AAs are not like technology companies that aggregate your data and create detailed profiles of you.

It further said that the data AAs share is encrypted by the sender and can be decrypted only by the recipient. The end to end encryption and use of technology like the ‘digital signature’ makes the process much more secure than sharing paper documents.

Can a consumer decide they don’t want to share data?

The ministry said that registering with an AA is fully voluntary for consumers. If the bank the consumer is using has joined the network, a person can choose to register on an AA, choose which accounts they want to link, and share their data from one of their accounts for some specific purpose to a new lender or financial institution at the stage of giving ‘consent’ via one of the Account Aggregators. A customer can reject the consent to share a request at any time. If a consumer has accepted to share data in a recurring manner over a period (eg during a loan period), it can also be revoked at any time later as well by the consumer.

If a consumer has shared data once with an institution, for how long can they use it?

The ministry in the release said that the exact time period for which the recipient institution will have access will be shown to the consumer at the time of consent for data sharing.

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