Take control of financial data with the Account Aggregator Network – The New Indian Express

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Express press service

BENGALURU: With all public sector banks joining the Account Aggregator (AA) ecosystem, individual borrowers can share their data with ease and all financial data can be consolidated under a single view.

In September 2021, the Financial Data Sharing System (AA Network) was launched, as it helps customers in many ways, from data security to personal finance management.

“The Account Aggregator (AA) framework is a platform that enables the sharing of a customer’s financial data between approved organizations within the AA ecosystem, subject to customer consent,” says Sumit Gwalani, co- founder of Fi.

For example, customers without a formal credit history find it difficult to obtain favorable loan terms. But with immediate access to a customer’s income and bill payment data, lenders can perform faster and more accurate credit scores.

Gwalani adds that having multiple bank accounts can give a fragmented picture of overall balance and spending. Linking these accounts together through the AA framework can give account holders a complete view of their finances in one place.

The AA, the Financial Information Provider (FIP) and the Financial Information User (FIU) are the main participants in the AA ecosystem. According to Sahamati, an industry alliance formed to promote the AA ecosystem in India, 1.1 billion accounts are active on the AA framework.

From just 180 million in September last year, the number of accounts reached 1.1 billion in August 2022.

FinBox was one of the first fintech companies to bring the AA framework online last year. He analyzed six months of data after integrating AA and found that financial statement fraud dropped by 45% after the company integrated the AA framework into its risk assessment solution .

In the six months prior to the FinBox integration, the percentage of overall fraud detected in financial statements was 11.04%. Currently, the overall percentage of fraudulent downloads has dropped to 6.4%.

Individuals can have full control over how their data is used and shared. “AA also removes the physical collateral requirement in many cases. Financial information gleaned from AA can help cross-check alternative data collected from a borrower’s device,” says Rajat Deshpande, co-founder and CEO from FinBox.

Direct customer benefits

The USP of this framework is that customer financial data, which is spread across multiple banks, insurers, mutual funds and other institutions, can now be consolidated under a single view on a digital framework, says Sameer Shetty, President and Head – Digital Business and Transformation, Axis Bank.

In a normal scenario, considerable effort is required, in which customers have to share their bank details with other banks/financial institutions using hard copies or pdf documents. However, with the AA framework, it is very easy for customers to share information either once or continuously for a set period of time. The framework also allows customers to revoke their consent at any time, he adds. Currently, approximately 0.93 million consents have been given.

According to Sahamati, there are 162 participants in various stages of implementation. Apart from banks, there are insurance companies such as Max Life Insurance, HDFC Life Insurance, Bajaj Allianz and NBFCs such as Amros Commercial, Lendingkart Finance and Cars24 Financial Services.

In India, there is a huge untapped opportunity in the MSME space. “There is a credit demand gap of around Rs 40 lakh crore. If we compare with our peers, we have the lowest household debt penetration,” says Ashok Jasani, Vice President, Head of Strategic Initiatives, Motilal Oswal Home Finance limited.

The United States has 75% debt relative to its GDP and we only have 11%. Even Brazil has 28% and China 56%. The similarity or exact match between different AA/OCEN (Open Credit Enablement Network) can help reduce the credit demand gap, Jasani added.

Points to note

  • RBI issues account aggregator licenses
  • AA cannot share data without their consent
  • Customers can either give consent or revoke at any time
  • All public sector banks are now online on the AA ecosystem
  • About 1.1 billion accounts are now active on AA

BENGALURU: With all public sector banks joining the Account Aggregator (AA) ecosystem, individual borrowers can share their data with ease and all financial data can be consolidated under a single view. In September 2021, the Financial Data Sharing System (AA Network) was launched, as it helps customers in many ways, from data security to personal finance management. “The Account Aggregator (AA) framework is a platform that enables the sharing of a customer’s financial data between approved organizations within the AA ecosystem, subject to customer consent,” says Sumit Gwalani, co- founder of Fi. For example, customers without a formal credit history find it difficult to obtain favorable loan terms. But with immediate access to a customer’s income and bill payment data, lenders can perform faster and more accurate credit scores. Gwalani adds that having multiple bank accounts can give a fragmented picture of overall balance and spending. Linking these accounts together through the AA framework can give account holders a complete view of their finances in one place. The AA, the Financial Information Provider (FIP) and the Financial Information User (FIU) are the main participants in the AA ecosystem. According to Sahamati, an industry alliance formed to promote the AA ecosystem in India, 1.1 billion accounts are active on the AA framework. From just 180 million in September last year, the number of accounts reached 1.1 billion in August 2022. FinBox was one of the first fintech companies to go live with the AA framework last year. He analyzed six months of data after integrating AA and found that financial statement fraud dropped by 45% after the company integrated the AA framework into its risk assessment solution . In the six months prior to the FinBox integration, the percentage of overall fraud detected in financial statements was 11.04%. Currently, the overall percentage of fraudulent downloads has dropped to 6.4%. Individuals can have full control over how their data is used and shared. “AA also removes the physical collateral requirement in many cases. Financial information gleaned from AA can help cross-check alternative data collected from a borrower’s device,” says Rajat Deshpande, co-founder and CEO of FinBox Direct Benefits to Customers According to Sameer Shetty, President and Head – Digital Business and Transformation, Axis Bank In a normal scenario, considerable efforts are required, in which customers have to share their banking data with other banks/ financial institutions using hard copies or pdf documents.However, with the AA framework, it is very easy for customers to share information either once or continuously for a set period of time.The framework allows customers to revoke their consent at any time, he adds. At present, about 0.93 million consents have been given. According to Sahamati, he are 162 participants in various stages of implementation. Apart from banks, there are insurance companies such as Max Life Insurance, HDFC Life Insurance, Bajaj Allianz and NBFCs such as Amros Commercial, Lendingkart Finance and Cars24 Financial Services. In India, there is a huge untapped opportunity in the MSME space. “There is a credit demand gap of around Rs 40 lakh crore. If we compare with our peers, we have the lowest household debt penetration,” says Ashok Jasani, Vice President, Head of Strategic Initiatives, Motilal Oswal Home Finance limited. The United States has 75% debt relative to its GDP and we only have 11%. Even Brazil has 28% and China 56%. The similarity or exact match between different AA/OCEN (Open Credit Enablement Network) can help reduce the credit demand gap, Jasani added. Points to note RBI issues AA account aggregator licenses cannot share data without its consent Customers can either give consent or revoke at any time All public sector banks are now active on the AA ecosystem Approximately 1.1 billion accounts are now active on AA

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