Union Bank of India is the first Public Sector Bank to go live on AA
Union Bank of India Joins Account Aggregator
Union Bank of India, one of the largest government owned banks in India, became the first public sector bank to go live on the Account Aggregator system. The bank announced its intent to leverage the Account Aggregator platform both as a FIP (financial information provider) as well as a FIU (Financial Information User). This is welcome news as with public sector banks joining Account Aggregator, the adoption rates for this powerful digital good will grow rapidly.
Account Aggregators are a new set of NBFCs, registered and regulated by RBI and act as consent managers on the behalf of citizens. They help sharing data digitally and speed up the transfer of data between Financial Information Providers (FIPs) and Financial Information Users (FIUs) by providing a single Account Aggregator data handle to customers, to which they can link all their financial accounts and can give a consent to their Account Aggregator to enable transfer of data from their existing FIP to a potential FIU.
Financial Information Providers are financial entities with which you have an existing account and hence, are your account data custodians for insurance, bank accounts, investments, etc. and at your consented request to the AA, will share the data you require. With Union Bank onboard, an additional 120 million customer accounts are now enabled on AA, which means their customers can access and consent to share their information instantaneously using the account aggregators. As per Sahamati’s estimate, today more than 310 million accounts out of total banking sector accounts of around 2.2 billion are enabled and available through Account Aggregator Ecosystem.
Financial Information Users are the financial institutions which require use of your financial data to offer financial services such as getting a loan, opening a new bank account, getting a new credit card, buying some insurance, etc. These entities request varied information to assess your current financial health to be able to make a decision to offer you a financial product. Account Aggregators enable these entities to request the customer to share this information through a digital interface for consent as well as data transfer. Union bank provides various types of loans such home loan, vehicle loan, education loan, etc. and as a FIU may stand to gain significantly by accessing information via the Account Aggregator ecosystem.
This is a big step that may soon pave the way for other public sector banks to join and bring about more awareness about the Account Aggregator system.