India launches Account Aggregator system to extend financial services to millions of people – TechCrunch
Five years ago, India’s biggest banks built the UPI Interoperable Railways and enabled more than 150 million people in the South Asian market to pay digitally. Dozens of companies – including local companies Paytm, PhonePe, CRED and international giants Google and Facebook – in India today support the UPI infrastructure, which now reports 3 billion transactions every month.
The banks are now ready for their second act.
Eight Indian banks announced Thursday that they are deploying – or are in the process of deploying – a system called Account Aggregator to allow consumers to consolidate all of their financial data in one place. (Participating banks are HDFC, Kotak, ICICI, Axis, SBI, IndusInd, IDFC, and Federal Bank. Four of them are rolling out the system on Thursday, others say they will roll out the new system soon.)
The purpose of Account Aggregator (AA) is to aggregate all of an individual’s financial information, Rajeshwar Rao, deputy governor of India’s central bank – Reserve Bank of India – said at a virtual event on Thursday.
The new system allows banks, tax authorities, insurers and other financial companies to aggregate the data of customers – who have given their consent – to better understand their potential customers, make informed decisions and secure more transactions. fluids.
Users who give their consent – and it only takes a few taps to do so – will be able to share their financial information from one account aggregator participant to another through a centralized API-based repository. Users can decide how long they want their data to be shared with a particular account aggregator participant.
“For taking out personal loans (‘eligibility check’), rather than submitting bank statements for the past 3 years, I can simply authenticate a data transfer via AA (and revoke the data transfer AFTER the loan is approved or sanctioned). For the self-employed or self-employed professionals, obtaining term insurance has always been difficult as they cannot prove their income – AA allows you to provide an audit trail of past income to purchase the application for term insurance ”, Rahul Mathur , founder and CEO of startup insurance aggregator BimaPe, said TechCrunch.
Account Aggregator is designed in part to help consumers and businesses access financial services such as loans. Existing credit bureaus in India only have data on a fraction of the country’s 1.4 billion people, making it very difficult for most people in the country to access working capital, the president said. from Infosys, Nandan Nilekani, who was an advisor to the initiative, at the event. Thusday.
“Talks are also underway with on-board telecom operators,” he said, adding that the system has already reached the sophistication that it could be extended to other industries.
“It’s an architecture that can now be applied to several other industries,” he said, citing healthcare, fitness and testing labs as examples. “We can confidently say that there is no other country in the world that has built such a robust infrastructure on a scale where its people can leverage their data. This approach is now recognized worldwide.
The Account Aggregator system is also positioned to dramatically increase the addressable market for online insurers, lenders and players in several other industries.
“This is a big step towards a connected financial ecosystem and will be very important in Fi’s journey to help working millennials manage their money better. With the successful demonstration of the framework today, we are excited to introduce all of our users to the power and convenience of AA integration once it is rolled out to all users, ”said Sumit Gwalani, co- founder of Fi.
This is a developing story. More soon…