Amit Goel (Cofounder, Medici) moderated the panel discussion. The expert panel consisted of Saurabh Nigam (CTO, DMI Finance), Manish Bhatia (President – Lendingkart Technologies), Srikanth Rajagopalan (CEO, Perfios AA), and Arjun Singh (Managing Director, Asia, Yodlee).
Importance of Data Authenticity (2:50s)
Authentic and accurate data is the foundation of all the innovations in digital finance. If Credit is a fabric, then data is the thread that weaves the fabric. If the threads are more robust, then the fabric will be stronger. So far, consumers did not have a way to view their unique data (or their life pattern) and use them to seek a tailor-made product. The Account Aggregator (AA) data will allow FIUs to build products and services tailor-made for consumers that suit their lifestyle instead of different segments.
AA will move FIUs towards end-to-end digitization of their services by digitizing the most important first-mile data collection that is safe, accurate, consented, and backed by data protection laws. The accuracy of the data analysis and prediction (with ML and AI) is higher if the input data is authentic.
Expectations from Account Aggregators(6:45s)
The FIU and FIP expect that the data provided needs to be simple, transferable, and transformable. The AA data schemas precisely address this, and combined with AA providing transformed data from different sources makes consuming data simple for the FIPs and FIUs.
AAs has the strongest architecture and design that is not comparable to any such implementation anywhere in the world. India will be the leader in countries that provide digital financial services with the help of AA.
AA Data Privacy and Usage (16:00s)
The AA ecosystems should focus on earning customer’s trust in India’s urban centers and rural parts. The ecosystem can earn trust by educating consumers about their data and how to use it for their advantage. A robust set of privacy laws combined with enforcements allow entrepreneurs with great ideas to build WOW experiences quickly in their garages from the data obtained from AA.
The AA data, combined with other accurate data sources (such as Credit Bureaus), allows FIPs to mine and predict customer behavior from data that are not authentic such as social media, SMS, and telecom. The AA data will help FIUs provide a friction-free experience for their customers to share their data. FIUs will use the AA data to train their ML models, exponentially increasing the predictability of its outcomes.
Opportunities Beyond Financial Services (25:09s)
The utopia for the AA ecosystem is when consumers start getting products and services tailored to their uniqueness. This will happen only when non-financial data starts coming from AA. Similar to how SoFI provided loans to a student without a credit history, FIUs can look at MNREGA data and qualify consumers for loans in India. The AA with non-financial data will broaden the model and score underserved consumers such as security guards and restaurant waiters instead of chasing high score individuals who do not need credit.
Key Takeaways from Panelists (31:00s)
In the four years since the UPI was launched, it helped create multiple unicorns. Similarly, AA is the next-generation digital infrastructure that can unlock entrepreneurial innovation and wealth creation if the entrepreneurs respect data privacy and earn customers’ trust. The incumbent players should treat AA as a completely new business opportunity, actively invest and innovate along with the fintech ecosystem.
They cannot remain bystanders and have to come into the ecosystem to share the data and build the highway. The AA ecosystem players have an opportunity to power India’s economic growth engine by bringing credit to the MSME ecosystem.