The Reserve Bank of India(RBI) introduced the Account Aggregator Framework on September 2, 2021. It is a financial data-sharing system that eases access to financial data and gives individuals more power to effectively control and manage their personal financial information. Since August 2022, the RBI has approved six more account aggregators, and eight are on the way.
The introduction of account aggregators() in India’s financial digital infrastructure has substantially increased the potential pool of customers for fintech companies and credit lenders. The AA aims at democratising access to financial data. This means not only will the lenders have access to high-quality financial data, but the borrowers will have more suitable and relevant borrowing options. Despite the widespread acceptance of AAs in India and the advent of AA brands like Anumati, there is a large stratum of people who are not yet familiar with what it is. They are often surrounded by queries and doubts that can cloud their judgment. It’s natural to feel hesitant about a new thing, but with the correct information, you can educate yourself and learn more about account aggregation. To help you know about account aggregation, here are four common questions about account aggregators in India.
1. What is an account aggregator?
An account aggregator(AA) can be defined as a non-banking financial company(NBFC) authorised by the RBI, which provides services like collecting and retrieving financial information related to various financial assets of the customers. The AA works under a contract and charges a fee for its services. The financial assets can range from the bank, fixed, recurring, savings, and current deposits to SIPs, Equity shares, ETFs, insurance policies, government securities, etc.
2. What is the purpose of the AA network?
The account aggregator framework was a result of an inter-regulatory decision between the RBI and several other regulators, such as the Securities & Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority (IRDA), and the Pension Fund Regulatory & Development Authority under the guidance of Financial Stability and Development Council (FSDC). The financial data is often scattered across various stakeholders and is in sols. The AA framework aims to share financial data digitally with users and lenders seamlessly and faster.
3. How does an account aggregator(AA) work?
The account aggregators work as intermediary, data blind, financial consent manager who collects and consolidates the data from various financial information providers(FIP) such as banks and seamlessly shares that data with financial information users(FIU) such as wealth management companies, insurance companies, credit services, etc.
4. What kind of financial data can be shared in the AA framework?
There are various kinds of financial data involved in the AA framework. Pensions, insurance, credit, securities, and tax data are examples of various financial information involved in the AA. Sometimes it can also expand beyond the financial sector and involve medical and telecommunications data. Companies like Anumati work as consent managers who provide consent to financial informer users to access the data on behalf of the user.
Account aggregators have changed how financial information is shared and flows across financial institutes and customers. The AA framework can help reduce financial scams and frauds and offer seamless access to financial data and better financial services. Now you know about account aggregation, which can help you make a better financial decision.
