Panel Discussion – Unlocking Potential: Open Finance & Inclusion

In a world increasingly driven by digital connectivity, financial inclusion remains a critical goal. This panel discussion brought together prominent voices from banking, account aggregation, and fintech to unpack the transformative potential of India’s Account Aggregator (AA) ecosystem.

Moderated by Arti Mohan, co-founder of Sattva Consulting, the discussion highlighted the roles of Jaswinder Sodhi (CMO, HSBC Wealth & Personal Banking India), Venkatesh Krishnamurthy (CEO, Saafe AA), and Bhargavi Sridharan (Head, Aditya Birla Capital). Together, they navigated the challenges, innovations, and opportunities that the AA framework presents for deepening financial inclusion in India and beyond.

Key Highlights from the Panel

1. A Paradigm Shift in Financial Inclusion

The panel began with a reflection on how India has digitized vast swathes of its economy within just eight years. From UPI-based payments to open digital commerce platforms like ONDC, financial digitization has reached street vendors and rural artisans alike. Yet, as Arti Mohan pointed out, 65% of MSMEs remain outside the formal credit network, underscoring the vast potential yet to be tapped.

Jaswinder Sodhi emphasized how India leads globally in open architecture payments and is now poised to leverage open finance to expand credit access. His vision includes using open finance for seamless credit portability across borders, benefiting students, entrepreneurs, and global citizens.

2. Breaking Barriers with Account Aggregators

Venkatesh Krishnamurthy provided a granular view of how Account Aggregators are reshaping the credit landscape:

• Access to Verifiable Data: AAs streamline fetching authenticated financial data, enabling faster credit decisions and reducing fraud.
• Tier 3 and Tier 4 Inclusion: By integrating AAs with initiatives like RBI’s ULI platform, small merchants and farmers can unlock credit using transaction histories from milk societies or POS devices.
• Purpose Codes: The AA framework’s evolving purpose codes allow lenders to tailor their offerings—from underwriting loans to wealth management—based on secure, consent-driven data.

3. Expanding Use Cases: Beyond Lending

Bhargavi Sridharan illustrated how the AA ecosystem enables the development of innovative financial products:

• Unsecured Credit on Fixed Deposits: NBFCs can now issue credit cards backed by FD liens, expanding credit to previously underserved segments.
• Personal Finance Management (PFM): By integrating financial data, providers can offer actionable insights and advisory services to the middle-income segment, which lacks access to premium wealth management services.
• Insurance Pricing: Behavioral data, such as small-ticket transactions on cigarettes, can refine underwriting models, improving pricing and accessibility.

4. Building Trust in the AA Ecosystem

Trust emerged as a central theme. As Sodhi and Krishnamurthy explained, while users are open to sharing data for personalized services, security concerns remain paramount.

Key measures enhancing trust include:

• Encryption and Consent: Data flows in the AA framework are encrypted, and users retain full control, with the ability to revoke consent anytime.
• Regulatory Oversight: RBI audits ensure adherence to purpose-specific data usage, preventing misuse by financial institutions.
• Technological Safeguards: Innovations like SIM binding on AA apps enhance security, protecting users from targeted phishing attacks.

The Road Ahead: Challenges and Opportunities

The panelists shared their perspectives on what’s needed to fulfill the AA ecosystem’s promise of inclusion:

1. Broadening Participation: Expanding the scope to include joint accounts, HUFs, and more financial products will increase relevance.
2. Enhancing Infrastructure: Smartphone penetration and standardization of financial data remain crucial.
3. Driving Awareness and Trust: Simplifying consent processes and ensuring seamless revocation will encourage wider adoption.

Conclusion: Unlocking New Possibilities

The account aggregator framework represents a cornerstone of India’s open finance journey, with vast implications for financial inclusion. By enabling secure, consent-based data sharing, AAs bridge the gap between underserved segments and formal financial services.

As Bhargavi Sridharan aptly noted, “We’ve only scratched the surface.” The panel concluded on an optimistic note, emphasizing the need for collective action across stakeholders to unlock the AA ecosystem’s full potential.

With robust analytics, innovative use cases, and a focus on trust, the AA ecosystem is well on its way to transforming the financial landscape—not just in India but globally.

Listen to the panel discussion session recording here.