The Reserve Bank of India (RBI) introduced the account aggregator framework on September 2, 2021, a financial data sharing system that will make financial data more accessible and give consumers control over their own financial data.
By democratizing data access, this latest enhancement to India’s financial digital infrastructure is projected to enlarge the pool of prospective consumers for lenders and fintech companies. Furthermore, because underwriters would have access to more data, borrowers will be offered more appealing borrowing options.
By digitally sharing financial data across institutions, the Account Aggregator system, which was recently established, would assist consumers and small businesses to have better access to loan and wealth management solutions in a hassle-free manner.
What is an Account Aggregator?
An Account Aggregator (AA) is an RBI-regulated firm (with a NBFC-AA license) that assists an individual in securely and digitally accessing and sharing information from one financial institution to any other regulated financial institution in the AA network.
Without the consent of the consumer, the data of the user will not be shared. There will be numerous Account Aggregators from which to choose. Account Aggregator substitutes the lengthy terms and conditions of a “blank check” acceptance with granular, step-by-step consent and control over each usage of your data.

Consumers in India’s financial system face numerous challenges today, including exchanging physically signed and scanned copies of bank statements, rushing about to notarize or stamp papers, and revealing your personal username and password to provide third party access to your financial history.
All of them would be replaced by the Account Aggregator network’s easy, mobile-based, straightforward, and secure digital data access and sharing method. This will open the door to new forms of services, such as new types of loans. All that is required is for the individual’s bank to join the Account Aggregator network.
Eight banks have already done so: four are sharing data with each other based on consent (Axis, ICICI, HDFC, and IndusInd Bank), and four more will be able to do so soon (State Bank of India, Kotak Mahindra Bank, IDFC First Bank, and Federal Bank).
How does Account Aggregation Work?

Financial institutions like banks, NBFCs, NBFC-AAs, third-party services, and others are members of the AA network. Banks serve as financial data providers (FIP), lenders serve as financial data users (FIU), NBFC-AAs serve as communication hubs for banks and lenders, and third-party service providers collaborate with AAs.
An individual first creates an account with an account aggregator. Then they link their bank accounts, insurance policies, and other accounts containing the customer’s financial data to establish a funnel for their financial data.
Second, the customer can use the NBFC-AA to give a lender permission to access their financial data. This usually occurs when a customer is applying for a loan or another financial product that necessitates the collection of their financial information.
Third, after receiving approval, the account aggregator asks the financial data providers for permission to access the customer’s data. Finally, the information is passed to the FIU by the AA in real-time.
Benefits of Account Aggregators
Information exchange platform
The Reserve Bank of India has licensed an Account Aggregator to act as an intermediary or exchange platform for banks and institutions that share and use data from the system. The platform’s job is to bring all customer’s financial data together in one location and operate as an information custodian.
Any bank, insurance firm, or mutual fund that shares data with AA, for example, will be able to access the data exclusively through the system. As a result, your bank or financial institution must be a member of one of the active AAs in the market.
No Paperwork or KYC
The procedure of sharing data becomes simple once your bank or institution provider is registered, as the institution is connected to the AA system via APIs. You don’t need to submit any paperwork for KYC if you need a new loan, want to acquire an insurance policy, or want to invest in a mutual fund, for example.
All you have to do is give AA your permission to share your data with banks and organizations. The AA will digitally extract your data from your bank and send it to the bank or organization where you are asking for a new loan or investment.
Security factor
If you’re concerned that your data will be used or misused by anyone, the AA framework contains very rigorous data privacy requirements. From your bank or any other NBFCs where you have applied for a new loan or any other business for a financial product, the data shared by the AA will be securely encrypted.
Data sharing control
As a customer, you will have complete choice over the quantity of data you want to disclose on an AA platform, as well as the duration during which the data will be available for any bank or financial institution to access. You can also choose to transmit only loan information or only credit card information, for example. Other information intermediaries, such as a credit bureau, are used by the lending institution to obtain extra information on you.
How can you become a part of it?

As of now, you can either join as a FIP or an FIU. A FIP or FIU can be a company that is registered and controlled by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority (IRDAI), or the Pension Fund Regulatory and Development Authority (PFRDA).
What is a FIP?
Institutions that act as custodians of user data are known as Financial Information Providers (FIPs). These are the banks, mutual funds, pension funds, and other financial institutions that serve as the ‘source’ of personal or company data that FIUs can obtain by submitting requests to an Account Aggregator.
What is an FIU?
Banks, lending agencies, NBFCs, and other financial information users (FIUs) can obtain digitally signed data from Financial Information Providers (FIPs). The data can be used by FIUs for the purposes stated in the Consent Artefact or in a data-sharing agreement.
The Bottomline
By unifying all of your data in one place and offering a single digital framework to exchange it in real-time, Account Aggregators give you the power to quickly transfer data between multiple financial service providers. Pirimid is a registered technology service provider by Sahamati. With an agile working ecosystem and rich experience in delivering high-quality tech frameworks at low costs, we offer world-class service with lifetime support. Reach out to us at info@pirimidtech.com to know how AA can benefit your business.
No more scrounging for documentation to open accounts, file taxes, obtain loans or gain access to other financial products. It’s a secure, consent-based architecture that gives more control over the data and allows consumers to access financial services faster.