The Account Aggregator (AA) Framework is set to revolutionise the fintech space in India. And all involved institutions stand to grow and benefit from it.

Participants in the AA Ecosystem

A Government-Authorized Framework for Data Sharing

The Personal Data Protection Bill 2019 (PDP Bill) defined the rights people have over their personal data and the regulations for entities accessing user data.

As a result, the financial service regulators, namely RBI, SEBI, IRDAI, PFRDA collaborated to make a well-defined and secure approach to financial data sharing — the AA Framework. In effect, AA extract, aggregate and transfer — but not read or store — users’ encrypted data.

Market players joining the AA Ecosystem

As a consent-based system of data-sharing powered by authorized technology architecture, its benefits are attracting more and more players to join the AA framework to share and acquire financial data with the user’s consent.

There are tremendous opportunities for institutions to participate in this next big fintech wave in India. They can be involved in various capacities like — FIPs, FIUs, AAs, TSPs, Certifiers.

As per RBI’s Master Direction- Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016,

xi. “Financial information provider” means bank, banking company, non-banking financial company, asset management company, depository, depository participant, insurance company, insurance repository, pension fund and such other entity as may be identified by the Bank for the purposes of these directions, from time to time; xii. “Financial information user” means an entity registered with and regulated by any financial sector regulator;

xii. “Financial information user” means an entity registered with and regulated by any financial sector regulator;

Share data securely as FIPs – Financial Information Providers

Banks, insurance companies, mutual funds, pension funds, etc. that hold users’ financial data and history. These custodians can play a major role in streamlining the secure data sharing in the AA ecosystem, and get various advantages:

  1. Gain better access to the users’ data from other information provider entities
  2. Build more trust in the users, and attract more power users from the Bharat’s Next Billion
  3. Get a platform to launch personalized services, based on consent-driven user data on AA apps

You can read more about FIPs here.

Build great product experiences as FIUs – Financial Information Users

All the financial entities that are FIPs can become FIUs. The list also includes banks, NBFCs, lending agencies, insurance companies, personal wealth management companies, etc.

Since these entities aim to provide personalized services based on users’ data, the AA framework helps them get user consent and data instantly. Other benefits of joining the AA ecosystem include:

  1. Get rich verified user data from GST invoices bank statements, etc. before giving credit to users
  2. Provide faster credit to users, attracting more small businesses
  3. Remove the time taken in physical examination of data, quickly access untampered pure data
  4. Make lending simpler
  5. Create faster, more compliant underwriting algorithms and monitoring systems
  6. Onboard users faster with faster verification of bank statements

You can read more about FIUs here.

Empower the new Fintech movement as Account Aggregators

User facing applications that let all stakeholders access the AA ecosystem are emerging. Currently, several Account Aggregators have been approved by RBI. AA apps will provide a secure environment that educates the users and also empower them to control their data better.

With AA apps the ecosystem is opening up to cater to various layers of the Bharat audience. AAs stand to gain a lot by making the backbone of this ecosystem, with benefits like:

  1. Integrate as the AA that powers different financial products from banks, NBFCs, insurance sector, securities and pension funds.
  2. Cater to the entities creating credit sources
  3. Make platforms that deploy revolutionary architectures like OCEN and DEPA

You can read more about Account Aggregators here.

Invent solutions for the next Billion users as TSP – Technology Service Providers

Delivering AA products and services involve multiple stakeholders from FIPs and FIUs. For this TSPs are an essential part of the AA ecosystem. There’s more to this segment of players, which can leverage cutting edge tech to create the backbone of financial experiences. And the opportunities are growing and unlimited:

  1. Design products relevant and essential for a Billion users and more
  2. Create secure experiences with algorithms
  3. Invent modules for financial product design
  4. Make deep tech solutions that empower all of the fintech space

You can read more about TSPs here.

Validating the integrity of FIP/FIU/AA implementation as Certifiers

To ensure interoperability & stability it is important to validate the implementation of FIPs/FIUs/AAs adheres to the AA Technical Specification. For this Certifiers are an essential part of the AA ecosystem. The certification process is not an audit or a security assessment but a non-invasive API standards compliance certification.

You can get an overview of the Certification process here.(Edit)