As most services are going digital, it is always useful to have your financial documents online. Now it’s easy to keep your financial data and documents in one place with the Reserve Bank of India (RBI) Account Aggregation Framework.
The Account Aggregation (AA) framework facilitates real-time, data-blind sharing of financial and other information between different regulated entities. Data will be available to both users and service providers through this mechanism.
If you want to avail the services, you will need to check with your service provider. If the provider is registered, you can give your consent. You can give your consent on the period during which you want your data to be shared on the AA platform.
More and more financial entities are joining this framework, which will allow you to synchronize your documents. The latest entrant was Union Bank of India, which became the first public sector bank to join the AA framework earlier this month. Even the capital markets regulator Securities and Exchange Board of India (Sebi) recently announced that it will soon join the framework click here
“AAs enable transparent encrypted data transfer between Financial Information Providers (FIPs) and Financial Information Users (FIUs) without storing, processing or selling the data, thereby eliminating any conflict of interest,” says Nikhil Kurhe, CEO of Finarkein Analytics, a data analytics company. the society.
SEBI will join #accountAggregator frame soon: SEBI President Madhabi Puri Buch at the SEBI Ideathon today 🎉@NandanNilekani pic.twitter.com/GkI5i4e9rq
— Sahamati (@sahamati) April 30, 2022
Here are five things A.A. can make easier for you by saving time and resources.
Five Use Cases for Account Aggregators
1. Wealth management: There are different types of financial assets, and people invest in them through various applications. An account aggregation platform, with user consent, can help consolidate all financial asset data into a single, readable document that can be shared with any service provider.
“What an account aggregator platform will do is extract all of this different asset data and compile it into a single readable format so that it can be shared with relevant financial institutions and then an analysis can be done without the need for physical surveys of all these different assets. This can save a lot of time and resources,” says Nageen Kommu, CEO and Founder of Digitap, a technology company providing AI-based solutions for the banking sector.
2. Take loans: Currently, to get a loan, several documents like bank statement, payslip, form 16, credit bureau report and other documents have to be processed by the lending bank.
“With customer consent, banks and other lending NBFCs may extract customer net worth data, investment data, and other financial data and use it with the credit bureau report (if available) can provide loan with better interest rate since now they own additional financial details like investments, assets, others of the client,” said Nalin Agrawal, Director of Snapmint, an NBFC fintech who is live with the account aggregation framework.
3. Expenditure monitoring: People often incur small discretionary expenses like buying popcorn at the movies or taking a taxi to work. These small expenses can add up to a lot over a period of time.
“Having a one-stop view of all financial data, including aggregated spending data from different banks in one place, can help consumers better understand where they spend most of their income and therefore help them manage them better,” added Agrawal.
4. Maintain health records: AA can also help you keep all your health-related documents in one place.
As part of the Ayushman Bharat mission, every Indian citizen will receive a digital ID card. Now, when this health data is linked to the AA platform, it will be able to provide a consolidated view of a user’s past and present health data. “Health technology companies, diagnostic centers, hospitals, etc. can access all of their patients’ health data (with consent) in a single, readable, consolidated format and provide faster, better diagnosis of the problem due to the availability of more information,” Kurhe added.
5. Buy insurance: Keeping a health record can make it easier to take out insurance, both in health and in life. An insurance company must financially guarantee the policy taken out by its client, and it depends on many factors such as the medical history of the client’s family, medical history, etc.
“With user consent, all data relating to health, medical record, current health conditions, salary information, network information and the like may be aggregated into a single readable format. This can help customers get better insurance premium quotes based on data and also help insurance companies underwrite said policy better,” Kurhe says.
Once all related entities are there, the journey will become much smoother for individuals.
