ICICI, HDFC, SBI Will Share Customer Data For Faster Loans, Services: Account Aggregator Platform Launched
8 Indian banks will roll out something called the Account Aggregator (AA).
This will help financial institutions such as banks, tax collectors, and insurers gather consenting individuals financial information
They can then gain a better understanding which can help smoothen transactions.
The 8 Participants
The eight banks involved are:
Users can provide consent with just a few taps and allow their data to be shared from one Account Aggregator participant to another using a centralised API-based repository.
They can also choose the duration for the information to be available.
The following are empowered to provide regulated financial information to those using it:
- Tax/ GST platform
- Government e-Marketplace
- Mutual fund house
- Insurance provider
The following can use the AA platform to use the data the providers offer:
- Lenders: Banks
- Lenders: NBFCs
- Personal finance management
- Robo advisors
The consent manager system works in 3 steps:
The first step– The data users mentioned earlier make a request.
The second step: Consent is asked from the person whose data is requested.
The third step: Upon consent, the request is then transferred to the data providers
Consumer Benefits: Access To Loans
A significant challenge the AA system will address is the lack of access to working capital.
The system shows the transactions which prove an individual’s credit worthiness.
Another benefit is the convenience of retail loan underwriting.
Consumer Benefits: No More Hassles
Here, instead of submitting multiple documents, one can simply authenticate their AA data to be transferred.
The data can also be later revoked after the loan is approved.
For those self employed or freelancers who face issues with getting term insurance, they can provide audit of past income through AA.
The AA system can be extended to other industries as well, such as healthcare, fitness and testing labs.
Telecom operators are in talks to be brought onboard as well.
It also serves as a major step towards a “connected financial ecosystem” which can help working millennials manage their money better.