SBI, ICICI, Axis, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, IndusInd Bank, and Federal Bank are among the eight major Indian banks that have just joined the Account Aggregator (AA) network, which will allow consumers to quickly access and share their financial data. The framework, which has been in the works since 2016 and has been under testing for a while, will now be available to all clients.
What is Account Aggregator?
An Account Aggregator, according to the RBI, is a non-banking financial firm that provides the service of obtaining or collecting financial information about its customers. It also consolidates, organizes, and presents such information to the client or any other financial information user as the bank may specify. An Account Aggregator is a financial tool that allows for the secure movement of data under the user’s control. It will gather all of the customer’s digital footprints in one place and make it easier for lenders to access them. The RBI issues AA licences, and the financial industry will have a large number of them. The importance of AA is that it eliminates the need for people to line for lengthy periods of time at banks, utilise Internet banking sites, or disclose their passwords in order to access and share their financial data. It would allow banks to access approved data flows and verified data, which is a welcome addition to India’s digital infrastructure. This will allow banks to lower transaction costs and provide consumers with more customised goods and services. It will also assist us in reducing fraud and complying with pending privacy legislation.
The AA framework was developed through an inter-regulatory agreement between the RBI and other regulators like as SEBI, IRDAI, and PFRDA, as part of the Financial Stability and Development Council’s effort (FSDC). Users may access a variety of financial services from a variety of providers on a single site using the AA framework, which uses a consent mechanism that allows customers to pick which financial data to share with which organisation.
The data sent over the AA is encrypted. Customers’ data cannot be stored, processed, or sold by AAs. The AA should not keep any financial information obtained from a bank. It should not enlist the help of a third-party service provider to handle account aggregation. The AA will not have access to client login credentials pertaining to accounts with multiple banks.
Source: The Indian Express