Pragati Webinar: Account Aggregator in Progress
The Pragati Awareness Session on “Account Aggregator in 2023” was an interactive session with an insightful exploration into the achievements and learnings of the past year, as well as a sneak peek into the exciting developments to anticipate in 2024. The event discussed the scale-up of the ecosystem across the sectors since its launch.
Supply-side Scale Up
Following the launch of the AA framework, the primary focus of the ecosystem has been accelerating adoption on the supply side of the data-sharing ecosystem. Subsequently, over 400 financial institutions, governed by the four financial sector regulators—the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, and the Department of Revenue under the Ministry of Finance—have joined the network.
The AA ecosystem witnessed a remarkable cross-sectoral scale-up in the past year. The number of FIPs and FIUs under the RBI more than doubled in this period. Simultaneously, SEBI-regulated FIPs became operational, with FIUs quadrupling in number. The growth in adoption by entities regulated by the IRDAI saw a significant multifold increase. Furthermore, PFRDA FIPs went live with National Pension System (NPS) data. Expanding beyond the four FSRs, 2023 witnessed the first integration of a strategic FIP through the Goods and Services Tax Network (GSTN) under the Department of Revenue (DoR) under the Ministry of Finance (MoF).
Together, these institutions empower more than 1.94 billion financial accounts, representing 56% of the total financial accounts in India across banking, insurance, securities, and pensions. Also, out of the 23 financial information (FI) types specified by ReBIT, 16 are already live. As the DoR is aligned with the framework on an executive level, more strategic FIPs are poised to join the network this year. This indicates a substantial momentum in the scale-up of the supply side within the account aggregator ecosystem.
Demand-side Scale Up
Over the past year, the usage of the account aggregator framework has witnessed a notable increase, with 39 million financial accounts being linked. The number of consents fulfilled successfully has surpassed the 40 million mark, underscoring the robustness and reliability of the system. Furthermore, more than 360 financial information users actively participate in the account aggregator network, showcasing a growing acceptance and participation in the system.
In the first half of FY24, account aggregators have facilitated lending disbursements totaling Rs 12,900 crores (1.55 Billion USD) n. The total disbursement via AA has reached Rs 20,050 crores (2.41 Billion USD) across 17.8 lakh loans. H1 FY24 witnessed the disbursal of 13.5 lakh loans, highlighting the network’s potential. Lenders have reported zero fraud rates on data shared via AAs, streamlining processes and enhancing overall speed and efficiency.
DPDP Act 2023
The introduction of the Digital Personal Data Protection Act (DPDP) marks a transformative moment for the Account Aggregator (AA) ecosystem. This legislation signifies a crucial step in institutionalizing data-sharing mechanisms, extending beyond the financial sector. The DPDP Act not only addresses concerns related to data protection but also presents a paradigm shift, creating opportunities for innovative use cases in both financial and non-financial sectors.
The DPDP Act of 2023 is a watershed moment, guiding India toward establishing an open data regime. This regulatory framework addresses privacy concerns and fosters an environment where data can be responsibly shared and utilized for various purposes, ultimately contributing to innovation and progress within the AA ecosystem.
Check out the recording of the complete session here –