Account aggregator system for credit access all set to onboard GSTN, PSBs

The account aggregator ecosystem, which went live in September last year with an aim to democratise credit access in the country, is now looking to onboard the GST Network (GSTN). 

This comes even as work is in full swing to get all the public sector banks (PSBs), including State Bank of India (SBI), live on the network.

It is also in talks with insurance behemoth Life Insurance Corporation (LIC) to start the onboarding process.

They are also hopeful that telecom and income tax data could be shareable through the ecosystem. This will bolster the data available within the ecosystem and strengthen the network proposition. However, work on it has not yet started.

BG Mahesh, co-founder, Sahamati, an industry alliance for the account aggregator ecosystem, said, “GSTN is in the process of getting onboarded. It will be very useful for citizens if telecom data, income tax data are shareable through the ecosystem.”

He added, “All the PSBs have started their work. Union Bank of India went live recently. We expect SBI, Bank of Baroda, Punjab National Bank and Canara Bank to go live in the coming months. Among private banks, all the large ones are live. We are also in talks with LIC to start the process of onboarding.”

While 300 million accounts are enabled on the account aggregator ecosystem, only 745,305 have actually been linked. And, around 700,000 consents for sharing data have materialised in the nine months of the ecosystem’s existence, according to data shared by Sahmati.

Currently, there are financial services entities that are at various stages of onboarding as financial information users (FIUs) and financial information providers (FIPs) in the ecosystem.

While 50 of them are live, another 13 are still in the testing phase, according to Sahamati. As many as 11 banks, including HDFC Bank, Axis Bank, ICICI Bank, IndusInd Bank and Kotak Mahindra Bank have gone live. Among PSBs, Union Bank of India and Small Industries Development Bank of India (SIDBI) are live.

Among insurers, Bajaj Allianz Life Insurance and Max Life Insurance have gone live in the ecosystem. Insurance web aggregator Policybazaar.com is also live.

Account aggregators are licensed non-banking financial companies (NBFCs) that enable instant exchange of financial data between FIPs and FIUs with the explicit consent of customers. 

They are “data-blind” as the data that flows through the system is encrypted and can be processed only by the FIU for whom it is intended.

Also, an account aggregator cannot store any user data. Thus, the potential for leakage and misuse of a user’s data can be prevented. So, an account aggregator acts as a conduit between FIUs and financial information provider FIPs but does not process the data.

“While the ecosystem is promising, we believe it still has ways to go before becoming a major channel for sourcing loans. Most large private banks have come onboard,” said Macquarie Research in a note.

“We believe the account aggregator value proposition to the banking ecosystem is strong but it is still early days. And, it still has ways to go before becoming a major channel for banks, the research note said.

According to the Sahmati website, there are six account aggregators with an operating licence. They are CAMSFinServ, Cookiejar Technologies Pvt Ltd (Finvu), FinSec AA Solutions Pvt Ltd (OneMoney), NESL Asset Data Ltd, Perfios Account Aggregation Services Pvt Ltd (Anumati), and Yodlee Finsoft Pvt Ltd.