Lars Markull moderated the panel discussed. The expert panel consisted of Anjani Rathor (Chief Digital Officer, HDFC Bank), Bijith Bhaskar (National Head, Digital Banking, Partnerships and e-commerce, ICICI Bank), Sameer Shetty (Head, Digital Business and Transformation, Axis Bank), Anshuj Sahaya (Business Head, Business Loans – Direct at Bajaj Finserv), and Raveesh Bhatnagar (SVP and Head – Digital Banking, IndusInd).
Use-cases that Drive Adoption (2:10s)
Loans (credit underwriting and collections) are the primary use-case drive the adoption of AA with consumers. Personal finance management (PFM) and other innovative use cases such as invoice financing) that only AA can enable, will be other use cases that may see early adoption. The financial data is the customer’s property. Allowing customers to share them with consent puts them in the driver’s seat. AA will enable banks to assess consumers’ risk at the bottom of the pyramid and make credit available.
Critical for Customer Adoption (5:57s)
Customer adoption will depend on the new use-cases that are interesting and useful for consumers. Besides, the pace of adoption will be driven by how quickly larger banks roll out their solution on top of AA to their customers. Consumers are more likely to adopt if the data sharing process is simple (such as making a UPI payment) that alternate options do not provide.
India will see a better adoption than other geographies because of the public digital infrastructure approach and well-restructured regulations. The AA use-cases are complex compared to payments requiring the ecosystem player to invest for its success purposefully.
India Specific Use-cases (14:50s)
Enabling end-to-end microlending that includes sourcing, underwriting, disbursal, and collection will be a unique use case specific to India. Assistance banking models will emerge since banks will have access to all customer data and don’t have to rely on relationship managers.
An extensive set of ecosystem players will become certified FIUs as the early use cases will go-live. The ecosystem players will need patience. They should not overestimate in the near term at the same time, not underestimate the long term impact. Non-Banking and fintech companies will drive innovations, while the incumbent early adopters will deliver the scale.
Consumer vs. SMEs (26:00s)
The impact of AAs will be across the spectrum, with different use-cases emerging for the various consumer segments. The SME loan processing is a lengthy process due to a lack of accurate data about an SME for underwriting. With AA providing these data to underwrite and monitor the loan, the lenders will aggressively address this segment.
Beyond Financial Services and Expectations (29:00s)
Data is a prerogative of the country’s citizens, and AA empowers them to share it with anyone with consent. The AA framework is transformational in the way it aggregates and shares the data. AA should extend to non-financial data sources such as healthcare and telecom.
It will be 2-3 years before AA becomes commonplace for consumers to share data. A lot of it depends on how AAs make it simpler to share the data, how FIUs use the data, and the emergence of different use cases.
Closing Statements (33:55s)
Account aggregator is a critical component in the digital infrastructure and is fundamental to how India progresses. The AA framework will make the bank’s process more straightforward and cheaper; it will help make life simpler. AA will provide a level playing field for all the players in the ecosystem. It will force ecosystem players to innovate and deliver the right product to the consumers.