Five years ago, India’s largest banks built interoperable UPI railroads that enabled more than 150 million South Asians to make digital payments. Numerous Indian firms, including Paytm and PhonePe as well as international companies like Google and Facebook, support UPI infrastructure. It now reports 3 billion transactions per month.
The banks are ready to perform their second act.
Eight Indian banks have announced on Thursday that they will be introducing — or are about to launch — an account aggregater system to allow consumers to centralize all of their financial information in one location. The participating banks include HDFC, Kotak and ICICI. The new system will be available to four banks on Thursday. Other banks say that they are preparing for it soon.
M Rajeshwar Rao (Deputy Governor of India’s central bank, Reserve Bank of India) stated that Account Aggregator’s objective is to combine all financial information of an individual. He spoke at a virtual event on Thursday.
This new system allows banks, tax authorities and insurers to combine data from customers who have consented to it. They can then gain a better understanding of their customers and make informed decisions to ensure smoother transactions.
It takes just a few taps for users to give consent to allow them to transfer their financial data from one Account Aggregator participant into another via an API-based central repository. The user can decide how long their data will be shared with an Account Aggregator participant.
For retail loan underwriting (eligibility check), rather than providing bank statements for the past three years, I can authenticate data transfers via AA. The loan will be approved and revoked after the transfer is completed. Term Insurance is difficult for self-employed professionals and freelancers. AA allows you to provide an audit trail showing past income in order to submit the Term Insurance Application.” Rahul Mathur (founder and chief executive at insurance aggregator startup BimaPe) told TechCrunch.
Account Aggregator was created to assist consumers and small businesses in accessing financial services, such as loans. The Indian credit bureaus that exist today have only small amounts of data, making it difficult for the majority of India’s population to get working capital. Nandan Nilekani from Infosys, Infosys Chairman, spoke at Thursday’s event.
He said that talks are underway to add telecom operators to the network, and that the system had already reached the level of sophistication necessary to be expanded to other industries.
He said that the architecture can be used in many other industries, such as healthcare, fitness and testing labs. We can confidently state that no country has ever built an infrastructure as robust and scaled that allows its citizens to leverage their data. This is a global approach that has gained international recognition.
The Account Aggregator system can also be used to significantly increase the market available for online lenders and insurers as well as players from many other industries.
This is an important step in Fi’s quest to connect financial ecosystems and it will play a significant role in Fi helping millennials manage their money better. We are thrilled to let all of our users feel the convenience and power of the integration with AA after we have demonstrated it today,” Sumit Gwalani (co-founder) of Fi.
It is still a story in progress. There will be more to come.
Publiated at Thu, 02/09/2021 11:53.04 +0000