 "Just how many self-regulatory organisations (SROs) are too many? Last week, the Reserve Bank of India (RBI) capped the number of such entities for non-banking financial companies (NBFCs) at “a maximum of two”. And to ensure the smaller NBFCs get a fa")
The account aggregator (AA) ecosystem has surpassed 100 million consents on the AA framework with about 80-90 million Indians using the system in the country, said DigiSahamati Foundation (Sahamati) the industry alliance for AA.
The number of financial information providers (FIPs) and financial information users (FIUs) has increased to 155 and 475 respectively as of August 2024.
In 2023, the AA ecosystem had 146 FIPs across banks, insurance firms, among others and 363 FIUs live.
In India, AAs act as consent managers that operate independent of FIUs which allows users and businesses to consensually share their financial data and manage consents at one place.
AAs use technology to ensure there is a secure exchange of data between financial institutions like banks, insurance agencies or mutual fund companies. The data can only be shared after securing a customer’s consent, following which it can be used to access financial services. AA collects a user’s digital financial data from one or multiple accounts, and shares it with a financial institution that may provide services such as loan or insurance.
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“The use cases have been expanding with FIUs using AA for streamlined tasks like customer onboarding to specialised tasks like controlling frauds,” said BG Mahesh, chief executive officer (CEO), Sahamati.
Consent requests have grown from 5.5 million in the financial year 2023 (FY23) to 63.75 million in FY24, Mahesh added.
AA consents grew by 1059 per cent, which signifies the phenomenal adoption and inroads of Open Finance in India.
It also makes India’s AA ecosystem, the fastest growing Open Finance ecosystem in the world, said Sahamati.
Mahesh added that the usage has expanded from the basic use case of underwriting loans to personal finance management, portfolio management, assessing early warning signals and monitoring of loan accounts, loan collections, issuance of insurance policies, opening of demat accounts and investment advisory.
An FIU and an FIP are major components of the AA ecosystem. FIPs are institutions that store user data such as banks, non-banking financial companies (NBFCs), depositories. They share customer’s financial information with an FIU through requests generated by an AA.
Setu AA by Agya Technologies, PhonePe, Anumati by Perfios Account Aggregator Services, are some of the 15 companies that have a license from the Reserve Bank of India (RBI) to operate as an NBFC-AA.
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