Account Aggregator Ecosystem

The Account Aggregators (AA) framework in India has been another revolution in the making. It is part of the larger India Stack.

Just as it was quietly taking shape since 2016, it has also silently started manifesting itself with many participants going live in stages over last few months. I discuss some of the salient aspects & Use cases of this as below: -

a. User Engagement with features like alerts
b. Aggregated picture of assets for Financial Planning & Wealth Management
c. Use cases in Lending like automated information sharing with user consent, credit appraisal, collections, risk etc.
d. User Account Verification
e. Can be embedded to existing apps of financial firms to enrich user experience.
f. More user information on Income Sources, Employment etc.

Eventually all this will lead to faster onboarding, better user experience and value added features.

The framework has the Account Aggregators (AA), FIU's (User of information), FIP's (Provider of Information) & the Customer. AA's just authenticate, pull the data from FIP and pass it on to FIU's based on Customers consent. No data is stored at AA level, and all exchanges happen in an encrypted manner between authorized parties in ecosystem.

The backbone of this is the consent layer API called, Data Empowerment and Protection Architecture (DEPA). DEPA aims to democratize data access while enabling secure portability of trusted data between service providers. This is unique, and I have also highlighted the importance of a Consent driven architecture in my book 3F: Future Fintech Framework.

Of course well begun is half done, we still have long way to go as AA considers only Assets across Bank Accounts, Equity, Demat, MF & Insurance and as I understand not all are live and we will gradually have access. Apparently GST data is available in AA. So many SME & Corporate use cases can be enriched.

However, there is no complete clarity on availability of Liabilities data, as AA is primarily assets related data. But, I understand that will get addressed somewhat through the OCEN Framework and the planned PCR. Gradually with all this and also Digi Locker which is part of the India Stack, the Fintech & Digital ecosystem is on a path for digital innovation & growth.

Happy Reading and look forward to your insights on AA.

(Image Source - Sahmati.org.in)