As nearly all services shift to a digital platform, it is always helpful to keep your financial work online. And, nowadays, keeping your financial information and paperwork in one place is now easier with the Account Aggregator framework RBI.
The account aggregator or AA framework facilitates the allocation of financial and other details on a real-time basis and in a data-hidden way among different standardized entities. The data will be accessible to both the users and service providers by this method.
If you want to benefit from these services, you would require checking with your service provider. If the provider is enlisted, you can give your approval. You can provide your permission on the period you wish your data transferred to the AA platform.
AAs allow flawless encrypted data sharing between FIPs (financial information providers) and FIUs (financial information users) without accumulating, processing or trading the data, thus, removing any clash of interest.
What are people saying about the account aggregator framework RBI?
Followers of the Account Aggregator framework RBI think that it is a huge step close to a linked financial ecosystem. The framework will offer a safe and effective way of transferring financial data that will help in decreasing transaction charges and financial scams while granting preference to the user’s consent. If these expense savings are passed on to the user, they will be capable of accessing swift baking benefits at a decreased cost.
On the contrary, critics disagree that the Account Aggregator framework permits an endless sum of responsive individual data sharing with an unlimited set of entities for no particular purpose. Policy advisers have also doubted the part of the RBI in controlling the flow of susceptible personal data, as here, the financial information sharing is not associated with the requirement of any financial solutions.
What data can be allocated using the AA network?
The AA network allows for customers’ financial information sharing, for example, bank deposits, mutual fund and equity investment data, bank statements, IT returns, GST returns, and pension funds, to any loan-providing organization.
Do the AAs have the power to access or collect data?
The financial data allocated using the AA platform is confidential and transferred in an encoded layout. The AAs are not accredited to access or store the financial information sent through them. Also, the account aggregators are not permitted to use 3rd-party services to execute the account aggregation business.
What’s The need for Account Aggregators?
Digitization and the growth of the Account Aggregator framework RBI integrate the consolidation of financial information and provide individuals with overall control of their data access, accumulation, and exchange. By using the AA framework, customers can offer access or take it back on the basis of their requirements and stay in control of the clarity of private financial data.
AAs will also help with the financial involvement of cash-starved MSMEs by offering financial organizations a broader perspective of their financial outline within seconds of getting the borrower’s authority. With improved visibility of the MSMEs financial data, MSMEs are kept in the best place to go through formal ways of financing. It has also seen the customers’ pool for loan providers with access to a big set of financial data to check the client’s creditworthiness.
The final goal of the AA framework is to speed up the loan assessment process, enable tamper-proof safe data sharing, and decrease overall financial data inequality.
5 Use Cases of AAs
Here are five essential things that Account Aggregators can smoothen for you by retaining on time and resources.
1.Wealth Management
There are diverse financial assets, and individuals invest in them through many applications. An AA platform, with the user’s approval, can help in consolidating all the financial assets-linked data into one readable form that can be allocated to any service provider.
What an Account Aggregator platform like Anumati will do is come through all these diverse asset data and make them in a sole readable layout. Thus, they can be shared with appropriate financial organizations, and then a detailed study can be completed without the requirement for physical notifications of all these assets. This can save enough resources and time.
2. Getting Loans
For obtaining a loan, many documents, for example, a bank statement, salary slip, credit bureau report, form 16, and several other documents, are needed to be handled by the lending organization.
With the customers’ consent, banks and different lending NBFCs can withdraw customers’ net value data, investment details and various financial information. Also, using that together with the credit bureau report can give a loan with the best interest rate as now they have extra financial data, such as assets, investments, and other customer data.
3. Tracking Expenses
Individuals often handle small leftover expenditures like purchasing popcorn at the cinema hall or going to work using a taxi. These small expenditures can add up to enough over a time period.
Including a single-window view of all the financial information, for example, overhead data accumulated from several banks in a single place may assist customers in getting a good grasp on which things they are paying most of their earnings on and thus help them in effective management of those.
4. Keeping Health Data
AAs can also help you in keeping all your health-associated documents in a single place. In the Ayushman Bharat mission, all Indian citizens will obtain a digital health identification card. So, when this health information is linked to the AA interface, it can give a close view of both previous and current health data of users.
5. Purchasing Insurance
An effective management of health records can simplify buying an insurance policy, both life and health. An insurance firm requires to financially approve the policy purchased by its customer, and this relies on different factors, such as the customer’s family health record, previous medical data, and others.
With the user’s consent, all the data related to health, medical, current health conditions, salary details, net worth data, and others can be collected into one readable layout. This can be helpful for the customers in getting better insurance premium quotes based on the data and also assist insurance firms in better approval of the stated policy.
Final Thoughts
The Account Aggregator framework RBI offers virtual gateways that ask individuals’ consent to see and share their financial data from FIPs to FIUs in a safe and encoded way. Also, combined access to individual financial details shows a path for a new age group of open banking that will change India’s digital lending environment.
