9 things you should know about account aggregators

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The Centre recently launched a new financial data sharing system called as the ‘Account Aggregators’ (AA) network which embodies the ability to modify the financial data sharing system specifically with respect to investment and credit.

The government called it as the first step towards bringing open banking in India and empowering millions of customers to digitally access and share their financial data across institutions in a secure and efficient manner.

An account aggregator is a system or entity that comes under the purview of the Reserve Bank of India (RBI). This entity comes with an NBFC-AA licence as well.

Primarily, account aggregator is like an entity that enables financial data sharing from Financial Information Providers (FIPs) to Financial Information Users (FIUs), based on the consent from the customers.

The AAs will aid customers to access personal financial information via digital media in a secure way. The details can also be shared further from one financial institution to another in the same AA network.

The aggregator aims to help individuals and small businesses in procuring loans from banks without any hassle by digitally sharing financial data across institutions.

The AA network allows sharing transaction details and/or bank statements from savings/deposit/current accounts in encrypted format by sender and can be decrypted only by the recipient.

The AA system kickstarted this month with eight banks and the govt believes it can make lending and wealth management a lot faster and cheaper. It will also save customers the effort of sharing physical signed and scanned copies of bank statements etc.

As per the govt, the AA framework will eventually make all financial data available for sharing, including tax data, pensions data, securities data and insurance data.