Sahamati wishes everyone a very happy new year! The year 2023 has been momentous for the AA ecosystem. In 2022, we witnessed adoption, and in 2023, we experienced a growth in usage. In the last year, significant legal and regulatory trends have reshaped the landscape of the Account Aggregator (AA) ecosystem.
The Digital Personal Data Protection Act (DPDPA) 2023 marks a pivotal moment in the evolution of the ecosystem. The legislation formalizes the role of consent managers as specialized entities in facilitating consent-based data-sharing transactions. As the first practical implementation of consent managers, the legal foundation of the account aggregator (AA) framework has solidified.
The ecosystem shows signs of maturity as the Reserve Bank of India (RBI) mandated reciprocity for all entities under its purview, emphasizing the need for mutual data exchange. RBI has directed all the participating FIUs to operate as FIPs if they possess financial information specified by the Reserve Bank Information Technology (ReBIT) schema.
The regulators have acknowledged streamlining eligible entities within their jurisdictions to participate in the AA ecosystem. The PFRDA has notified that Central Recordkeeping Agencies (CRAs) in place of NPS funds are FIPs, and Points of Presence (POPs) are to function as sole FIUs. The SEBI came out with a consultation paper to gather industry opinion on the need to streamline the eligibility of entities under its purview to participate in the AA ecosystem as FIPs or FIUs.
As the ecosystem matures, the financial information schemas are also being streamlined. ReBIT separated insurance schemas into two distinct data schemas for Life Insurance and General Insurance. The introduction of newer schemas can unlock newer use cases. These changes poise the insurance sector for rapid adoption. Similarly, schemas for other FI types, such as GSTN, have also been released.
More than 500 REs across the four financial sector regulators (FSRs) are at various stages of adopting the AA framework. FIPs with tax data falling under the purview of the Department of Revenue (DoR) Ministry of Finance (MoF) are also poised to join the network. The Goods & Services Tax Network (GSTN) was the first to go live in 2023. This year, we focus on activating the Central Board of Direct Taxes (CBDT) on the network.
With these developments, the AA ecosystem has successfully ramped up the supply side for the network. Live entities have collectively empowered more than 1.94 billion financial accounts, constituting 56% of the total financial accounts (including bank accounts, Demat accounts, mutual fund folios, GST taxpayers, and pension accounts) in India, to share data through the AA framework. Over 38.96 million financial accounts have already been linked, representing 1% of the total financial accounts. As the ecosystem witnessed significant adoption across sectors, successful data shares have skyrocketed from 3.3 million in 2022 to an average of 40.09 million by the end of 2023. In December 2023, the average successful fetches amounted to 1.66 lakhs daily.
As adoption increased, it was crucial to institutionalize self-governance mechanisms for a healthy scale-up. Sahamati convened three committees under its Governing Council (GC) to address Interoperability, Fair Use of AA, and Economic Model. At the same time, Sahamati also constituted Use Case Councils for Lending, Personal Finance Management (PFM), and Insurance, ensuring participatory governance and addressing critical hurdles for the ecosystem. Through deliberations in the lending council, community guideline PC004 on “one purpose, one consent” has been rolled out.
With these legal, regulatory, and self-regulatory developments, the demand side of the network is poised to scale up rapidly. As the AA ecosystem enters a crucial phase this new year, let us strive for a successful scale-up through collective efforts and resolve!
