Account Aggregator Community Event: How will data drive the next generat...

Account Aggregator Community Event: How will data drive the next generat..

Sahamati held the Account Aggregator Community event on Dec 28, 2020 to recognize the entities (account aggregators, Financial Information Providers, Financial Information Users) who have been certified and are production ready. The panel discussion ‘How will data drive the next generation of Digital Finance?’ was moderated by Amit Goel (Cofounder, Medici). The expert panel consisted of Saurabh Nigam (CTO, DMI Finance), Manish Bhatia (President- Lendingkart Technologies), Srikanth Rajagopalan (CEO, Perfios AA), and Arjun Singh (Managing Director, Asia, Yodlee).

2021- Account Aggregators- India's Innovation in Financial Services

Since 2009. INDIA’S INVESTMENTS IN ITS DIGITAL financial infrastructure—known as “India Stack”—have sped up the large-scale digitization of people’s financial lives. As more and more people begin to conduct transactions online, questions have emerged about how to provide millions of customers adequate data protection and privacy while allowing their data to flow throughout the financial system.

Data-sharing among financial services providers (FSPs) can enable providers to more efficiently offer a wider range of financial products better tailored to the needs of customers, including low-income customers. However, it is important to ensure customers understand and consent to how their data are being used. India’s solution to this challenge is account aggregators (AAs). The Reserve Bank of India (RBI) created AAs in 2018 to simplify the consent process for customers.

In most open banking regimes, financial information providers (FIPs) and financial information users (FIUs) directly exchange data. This direct model of data exchange—such as between a bank and a credit bureau—offers customers limited control and visibility into what data are being shared and to what end.

When a customer gives consent to a provider via the AA, the AA fetches the relevant information from the customer’s financial accounts and sends it via secure channels to the requesting institution.

AAs have been designed to sit between FIPs and FIUs to facilitate data exchange more transparently. Despite their name, AAs are barred from seeing, storing, analyzing, or using customer data. As trusted, impartial intermediaries, they simply manage consent and serve as the pipes through which data flow among FSPs.

ACCOUNT AGGREGATORS (AAs) IS ONE OF THE NEWEST CATEGORIES of non banking financial companies (NBFCs) to figure into India Stack—India’s interconnected set of public and nonprofit infrastructure that supports financial services.

The Indian government has developed a comprehensive technology framework to guide the implementation of its policies for consensual data-sharing, including the establishment and operation of AAs. It provides a set of guiding design principles, outlines the technical format of data requests, and specifies the parameters governing the terms of use of requested data. It also specifies how to log consent and data flows.

RBI created AAs to address the challenges posed by the proliferation of data by enabling data-sharing among financial institutions with customer consent. The intent is to provide a method through which customers can consent (or not) to a financial services provider accessing their personal data held by other entities.

India Stack has scaled considerably since its creation in 2009, marked by rapid digitization and parallel growth in mobile networks, reliable data connectivity, falling data costs, and continuously increasing smartphone use. Consequently, the creation, storage, use, and analyses of personal data have become increasingly relevant. Following an “open banking” approach,

the Reserve Bank of India (RBI) licensed seven AAs in 2018 to address emerging questions around how data can be most effectively leveraged to benefit individuals while ensuring appropriate data protection and privacy, with consent being a key element in this.

The Role of Account Aggregators:

Despite the nomenclature, AAs are, by regulation, barred from seeing, storing, analyzing, or using client data. They simply are consent managers who act as trusted and impartial intermediaries between users and providers of data. The concept of AAs emerged from discussions at the Financial Stability and Development Council, the apex body for Indian financial sector regulators, in 2015.7 In 2016, RBI released the Account Aggregator Master Direction, and the four financial sector regulators—RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund, Regulatory and Development Authority (PFRDA)—agreed to allow their regulated entities to participate.

Providers are interested in these data, in part, because information shared by customers, such as bank statements, will allow providers to better understand customer risk profiles. The hypothesis is that consent-based data-sharing will help poorer customers qualify for a wider range of financial products—and receive financial products better tailored to their needs.

Reference: Datwani, Leena, and Anand Raman. 2020. “India’s New Approach to Personal Data-Sharing.” Working Paper. Washington, D.C.: CGAP.

#DigitalIndia #AccountAggregators

Account Aggregators- India's Innovation in Financial Services

Account Aggregators:
India’s Innovation in Financial Sector(1)

Since 2009. INDIA’S INVESTMENTS IN ITS DIGITAL financial infrastructure—known as “India Stack”—have sped up the large-scale digitization of people’s financial lives. As more and more people begin to conduct transactions online, questions have emerged about how to provide millions of customers adequate data protection and privacy while allowing their data to flow throughout the financial system. Data-sharing among financial services providers (FSPs) can enable providers to more efficiently offer a wider range of financial products better tailored to the needs of customers, including low-income customers. However, it is important to ensure customers understand and consent to how their data are being used. India’s solution to this challenge is account aggregators (AAs). The Reserve Bank of India (RBI) created AAs in 2018 to simplify the consent process for customers. In most open banking regimes, financial information providers (FIPs) and financial information users (FIUs) directly exchange data. This direct model of data exchange—such as between a bank and a credit bureau—offers customers limited control and visibility into what data are being shared and to what end. AAs have been designed to sit between FIPs and FIUs to facilitate data exchange more transparently. Despite their name, AAs are barred from seeing, storing, analyzing, or using customer data. As trusted, impartial intermediaries, they simply manage consent and serve as the pipes through which data flow among FSPs. When a customer gives consent to a provider via the AA, the AA fetches the relevant information from the customer’s financial accounts and sends it via secure channels to the requesting institution. The Indian government has developed a comprehensive technology framework to guide the implementation of its policies for consensual data-sharing, including the establishment and operation of AAs. It provides a set of guiding design principles, outlines the technical format of data requests, and specifies the parameters governing the terms of use of requested data. It also specifies how to log consent and data flows. ACCOUNT AGGREGATORS (AAs) IS ONE OF THE NEWEST CATEGORIES of non banking financial companies (NBFCs) to figure into India Stack—India’s interconnected set of public and nonprofit infrastructure that supports financial services. India Stack has scaled considerably since its creation in 2009, marked by rapid digitization and parallel growth in mobile networks, reliable data connectivity, falling data costs, and continuously increasing smartphone use. Consequently, the creation, storage, use, and analyses of personal data have become increasingly relevant. Following an “open banking” approach, the Reserve Bank of India (RBI) licensed seven AAs in 2018 to address emerging questions around how data can be most effectively leveraged to benefit individuals while ensuring appropriate data protection and privacy, with consent being a key element in this. The Role of Account Aggregators: RBI created AAs to address the challenges posed by the proliferation of data by enabling data-sharing among financial institutions with customer consent. The intent is to provide a method through which customers can consent (or not) to a financial services provider accessing their personal data held by other entities. Providers are interested in these data, in part, because information shared by customers, such as bank statements, will allow providers to better understand customer risk profiles. The hypothesis is that consent-based data-sharing will help poorer customers qualify for a wider range of financial products—and receive financial products better tailored to their needs. Despite the nomenclature, AAs are, by regulation, barred from seeing, storing, analyzing, or using client data. They simply are consent managers who act as trusted and impartial intermediaries between users and providers of data. The concept of AAs emerged from discussions at the Financial Stability and Development Council, the apex body for Indian financial sector regulators, in 2015.7 In 2016, RBI released the Account Aggregator Master Direction, and the four financial sector regulators—RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund, Regulatory and Development Authority (PFRDA)—agreed to allow their regulated entities to participate. Reference: Datwani, Leena, and Anand Raman. 2020. “India’s New Approach to Personal Data-Sharing.” Working Paper. Washington, D.C.: CGAP. #DigitalIndia #AccountAggregators

India Stack and the Role of Account Aggregator by Sanjay Jain

India Stack and the Role of Account Aggregator by Sanjay Jain






In our masterclass series held during the first Account Aggregator Hackathon, Sanjay Jain, Partner, Bharat Innovation Fund walks us thru IndiaStack.org - identity (Aadhaar), payments (UPI), data (Account Aggregators).

Account Aggregators Insurance: A Masterclass by Anand Datta, VP, Nexus...

In this video, Anand Datta (VP, Nexus and former India CEO/Head of New Markets (Asia) of insurtech company BIMA) talks about how companies can leverage the new AA framework to build new and innovative insurance products

Mr Ajay Prakash Sawhney, Secretary MeitY at the Account Aggregator launc...

The Ministry of Electronics and Information Technology, MietY, played an instrumental role in building out the AA infrastructure.
AA is based on the national standard managed by MeitY for Electronic Data Consent and follows the Open API guidelines that have been issued under MeitY.

Mr Nandan Nilekani Introducing Account Aggregator

On 26th April 2019, Seven of these AAs has gone into a closed user group testing. This is an epoch moment when the users in India can claim ownership over their own financial data.

We hope that this will accelerate the revolution of cash flow based lending that will replace the existing paradigm of collateral-based lending. This isn’t only a consumer-centric innovation.

Access to the right data means lenders can proactively monitor and evaluate currently disbursed loans. Such a move will not only increase the quantity of lending through increased access but also the quality of lending through better screening of borrowers, early alerts, etc.

For more information, please visit: https://sahamati.org.in/