Account Aggregator Framework

By : Neha Dhyani

Updated : Sep 14, 2022, 8:35

An Account Aggregator network is a digital, non-banking financial business that helps individuals digitally collect, access, and share their financial information from one financial institution to the other through a network. Regulated by RBI, Account Aggregator is a consent-based system that aims to make financial data more accessible by using aggregators (AAs) as mediators, enabling a smooth flow of financial information.

Account Aggregator framework was launched on November 2 2021, with the eight major banks of India: ICICI Bank, State Bank of India, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, Axis Bank, Induslnd Bank, and Federal Bank. To know more about the Account Aggregator Framework, read the information given here.

Account Aggregator Framework

Account Aggregator Framework shares data between financial institutions such as banks, insurance companies, and pension funds. The data is shared between institutions securely using technology. An Account Aggregator Network helps people to access a diverse range of financial services for their personal or business needs. Check out more details about this framework below:

  • All Account Aggregators (AA) require a license from the Reserve Bank of India (RBI).
  • As per the Account Aggregator Framework, the customer's data is shared between financial information users (FIUs) and financial information providers (FIPs).
  • In many cases, FIU and FIP can be the same entity.

Account Aggregator Framework - Major Components

An Account Aggregator Network is composed of parties/organizations that act as financial information users (FIUs) and financial information providers (FIPs). Sometimes, an organization may be both FIU and FIP. We have provided more information about the major components of AA below:

  1. Financial Information User (FIU) - The entity which seeks access to the borrower's financial data and previous financial activities to ensure his eligibility against the loan proposed. In an Account Aggregator framework, FIU can be lending banks, personal financial management providers, wealth management providers etc.
  2. Financial Information Provider (FIP) - It is the entity that holds and provides the desired data to the FIU with the consent of the customer in question. FIP can be a bank, mutual fund, insurance repository, Non-Banking Financial Company (NBFC), Pension Fund Repository, etc. Banks can play a dual role both as FIUs and FIPs.
  3. Account Aggregators - These intermediaries facilitate the transfer of financial information from a FIP that holds customers' financial data to the FIU that provides such information. This is done after taking the consent of the customer. Account Aggregator don't store the customer's data; they only function as facilitators for both parties.

Account Aggregator - Benefits

An Account Aggregator can benefit the customers as well as banks in several ways. The financial data of a customer may be required for many reasons by institutions such as banks. To know how useful an Account Aggregator framework can be, read the points given below:

Benefits of Account Aggregator Framework to Customers

It lets consumers pool and view all their bank accounts in a single digital space. The Account Aggregator has simplified two major things for its customers - easy access to money management and loan applications. It is also a straightforward framework to use. There are simple steps to provide consent for data sharing. The consumer will be informed with whom the data is being shared, the purpose of sharing data, etc.

Benefits of Account Aggregator to Banks

It confirms the creditworthiness of people seeking loans from banks. Instead of following vigorous procedures like checking documents and calculating the credit score of loan-seekers, an Account Aggregator framework provides complete financial records of customers. This will help banks cater to the needs of the customers in a better way. The banks can curate custom-made loan schemes to address the loan seeker's needs and financial conditions.

Why Do We Need an Account Aggregator?

There are many reasons why we need an Account Aggregator framework. It helps to process and share vital financial information from one person/organization to another. Here are some reasons why we need AAs:

  • An Account Aggregator aims to disrupt the cumbersome flow of financial information that we have today.
  • It can potentially bring a paradigm shift, transforming the system of personal data management and processing into an institution-centric system.
  • The Account Aggregator has the potential to revolutionize the financial ecosystem.
  • This can change the organization-centric financial system to a human-centric one.

Account Aggregators in India

The Account Aggregator framework is vast in India. As per the RBI, 8 AAs in India make financial data sharing efficient and safe. The list of the Account Aggregators in India is given below:

  • CAMS FinServ
  • Cookiejar Technologies (product named Finvu)
  • Jio Information Solutions
  • National E-Governance Services Asset Data
  • FinSec AA Solutions Private (OneMoney)
  • Yodlee Finsoft, Perfios Account Aggregation Services
  • Aditya Birla Trustee Company.

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FAQs on Account Aggregator Network

Q1. What is an Account Aggregator Network?

An Account Aggregator Network is a non-banking financial business carried out digitally to help individuals collect, access, and share their financial information from one financial institution to another through a digital network.

Q2. Who launched the Account Aggregator Network?

Account Aggregator network was launched by the Reserve Bank of India (RBI) on September 2, 2021. The aim was to create a framework that safely eases financial data sharing in a digital network.

Q3. Who are the Account Aggregators in India?

The institutions that are a part of the Account Aggregator network in India include ICICI Bank, State Bank of India, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, Axis Bank, Induslnd Bank, and Federal Bank.

Q4. How can you become an Account Aggregator in India?

To become a part of the Account Aggregator framework in India, the requirement is to obtain a license from the Reserve Bank of India. Some companies with the AA license include NESL Asset Data, Finsec AA Solutions, and Finvu.

Q.5. Is Account Aggregator Network free?

This completely depends on the AA. While some organizations in the Account Aggregator network may charge a nominal user fee, others may not, as they charge a service fee to the financial institutions.