Democratizing AA: The time is now! And here’s how

24 May 2023
  • An intriguing conversation with Mr. Nandan Nilekani, Co-Founder and Non-executive Chairman of Infosys, ex-Chairman of UIDAI, and a Technology influencer turned Philanthropist.
  • He remarked on how Account Aggregator is a game changer in lending and financial inclusion.
  • He highlighted the significant impact of AA on accommodating a large section of Indian society.
  • He identified access to credit as the crucial problem to solve before we reap the benefit of inducting a sizable population into the formal economy.

During Sahamati’s SamvAAd May 2023 event held at Westin, Powai in Mumbai, Mr. Amol Dethe, Editor of ETBSI and a prominent finance journalist, engaged in a fireside chat with Mr. Nandan Nilekani. Nandan is India’s pioneer in realizing the dream of Public Digital Infrastructure at the base of the transformative force driving emergent India.

Their discussion focused on democratizing Account Aggregator Architecture and its vast potential to drive inclusive growth.

The Significance of India’s Digital Infrastructure:

Mr. Nandan Nilekani emphasized the significance of India’s digital infrastructure and its impact on the country’s ongoing transformation. He highlighted the journey of pivotal events starting in 2016 that played a crucial role – the attainment of 1 billion Aadhaar enrollments, the launch of the Unified Payments Interface (UPI), and late last year, the introduction of the Account Aggregator system by the Reserve Bank of India (RBI).

The Account Aggregator System:

Mr. Nandan Nilekani articulated the essence of the Account Aggregator system, describing it as a game-changer that enables individuals to harness their digital footprints for personal and business growth.

Nandan highlighted that while lending for small businesses and individuals is a compelling use case at present, the scope of the Account Aggregator model extends well beyond the financial sector.

Unlocking Digital Capital and Promoting Formalization:

Nandan discussed the importance of unlocking digital capital through the Account Aggregator system.

He emphasized that individuals, even without financial capital, can leverage their digital footprints to improve their lives. He sees this as a foundation for the formalization of the economy, providing impetus for faster growth.

He thinks AA incentivizes individuals to join the formal economy through their own data ownership and utilization to benefit the citizenry’s inclusive growth.

The Role of Financial Innovation:

Mr. Amol Dethe probed into the potential of fintech and tech companies operating within  the AA space and the potential to monetize their innovations. Nandan highlighted that these companies must develop innovative products and services for which consumers are willing to pay. He emphasized that finding viable models is up to the market forces, as is usually the case with disruptive change.

Nandan forecasts a bright landscape of opportunities for innovation as the framework of the Account Aggregator takes root in days to come. He predicts that shifting from a prepaid to a postpaid economy will expand the need for and access to credit, and the digital footprints of individuals and businesses will drive future financial innovation in India.

Regulatory Considerations and Data Privacy:

Addressing concerns about data privacy, Mr. Nandan Nilekani assured that the Account Aggregator system had been developed in collaboration with regulators, ensuring robust security measures from full-proof specifications to robust implementation.

The Role of Regulators:

Nandan acknowledged the pivotal role of regulators (RBI, SEBI, IRDAI, PFRDA, etc.) in creating an environment conducive to innovation while maintaining necessary oversight. Their collaborative efforts have resulted in a cross-sectoral approach to data sharing and innovation through the Account Aggregator system, the first of its kind in the modern history of India.


While concluding, Nandan was bullish on the prospect of increasing democratization of Account Aggregator Architecture (AAA) and its potential to drive inclusive growth in India. He firmly asserted that the transformative power of the Account Aggregator system has the potential to uplift individuals and drive inclusive growth across sectors, contributing to the vision of a digitally empowered nation.

Watch the entire session here:

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