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NEW DELHI : Thousands of Indians have signed up for and are using the apex bank-regulated account aggregator (AA) platform in less than two months of it going live.

The platform enables users to have a single view of their consolidated financial information such as savings, fixed deposits, mutual funds, equity investments and insurance, and voluntarily share this with financial institutions to get loans and better deals on other financial products quickly.

More than 7,000 accounts have been linked so far and nearly 6,000 people have used AA to share data, according to estimates by industry experts.

The aggregated data also helps businesses by allowing them to use the information to take faster decisions on granting loans and monitor the investments of customers and loan payments.

An AA, according to a Reserve Bank of India (RBI) note, means “a non-banking financial company (NBFC)... that undertakes the business of an account aggregator, for a fee or otherwise..."

The AA platform was created following a decision by RBI, the Securities and Exchange Board of India (Sebi), the Insurance Regulatory and Development Authority (IRDAI) and the Pension Fund Regulatory and Development Authority  (PFRDA) through the Financial Stability and Development Council.

RBI issues licences to AAs. Seven entities have already got the RBI licence or an in-principle nod to operate as AAs, including CAMS Financial Information Services, PhonePe, Finvu, OneMoney, Yodlee and NESL Asset Data Ltd, a wholly owned subsidiary of NeSL.

Four banks, including HDFC Bank, ICICI Bank, IndusInd Bank, and Axis Bank, are already part of the AA platform, having begun operations in July. Four more banks are expected to go live soon, including State Bank of India, Federal Bank, IDFC First and Kotak Mahindra Bank.

On Monday, PhonePe said it got in-principle approval from RBI to operate as an AA, which will permit it “to launch its account aggregator platform, allowing the free and instant exchange of financial data between financial information users (FIUs) and financial information providers (FIPs) with consent from customers in a safe and secure manner".

FIP could mean a bank, NBFC, asset management company, depository, insurance company, insurance repository or a pension fund, while FIU covers entities registered with and regulated by any financial sector regulator.

“It’s early days. The ecosystem went live only about 45 days ago. However, we already have a couple of thousand transactions such as data requests for financial information. We have more than 2,500 users," said Munish Bhatia, co-founder of Finvu.

The AA platform, which can be likened to the United Payments Interface (UPI) platform, was designed by Reserve Bank Information Technology Pvt. Ltd (ReBIT), a wholly-owned subsidiary of RBI that takes care of the IT requirements, including cybersecurity needs, of the apex bank and its regulated entities.

It is based on the Data Empowerment and Protection Architecture (DEPA) frame, which empowers every Indian with control over their data. DEPA is also known as the ‘Consent Layer of IndiaStack’.

IndiaStack is a set of application programming interfaces (APIs) that allows governments, businesses, startups and developers to use a digital infrastructure to enable presence-less, paperless and cashless service delivery such as Aadhaar and UPI platforms. The Open API team at iSPIRT has been a “pro-bono partner in the development, evolution and evangelisation of these APIs and systems", according to the IndiaStack website.

There are many benefits to users even as the DEPA framework protects their privacy. Indians typically have to provide a statement of their bank account when applying for a personal, auto or home loan. These are usually shared as paper records with the bank’s stamp, but the data can be misused for other purposes.

AAs operate on a fee-for-transaction business model and are legally prohibited from storing or selling data. Further, the data is encrypted, implying that AAs cannot read your financial information when sharing it with a financial institution and only have access to your customer profile with which you signed in.

Entities under Sebi, PFRDA and IRDAI are soon expected to join the AA ecosystem, according to industry experts.

“Many institutions are approaching us and we hope to scale up in 6-8 months," said Bhatia of Finvu.

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