Union Bank of India became the first public sector bank to go live on the Account Aggregator (AA) ecosystem, the bank said on April 29.
Touted as the UPI moment for lending, the AA framework ensures swift data sharing with the consent of the user and eliminates the need for physical documents.
Since it went live in September 2021, 332,000 customer accounts have been linked and over 310,000 consent requests have been fulfilled.
The framework facilitates sharing of financial information on a real-time basis between regulated entities. AAs are licensed by the Reserve Bank of India to enable the flow of data between Financial Information Providers (FIPs) and Financial Information Users (FIUs).
FIPs are institutions that hold customer data and FIUs are entities that consume data to offer better service, underwrite loans, and so on. Banks and other financial institutions must become FIPs to be able to also become users of data from other financial institutions.
An AA is data blind and only receives encrypted data which is decrypted only by the FIP.
Union Bank of India has said that it will work both as an FIU and FIP to allow its customers to share data digitally on a real-time basis.
Major private sector banks like HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank are already live as FIPs and FIUs. There are 34 banks, non-banking financial companies (NBFCs) and other institutions so far live on AA, including Federal Bank, IDFC First Bank and IndusInd Bank.
Moneycontrol had reported on January 17 that the next step for the ecosystem is to grow the number of FIPs and get more banks to go live, mainly the State Bank of India (SBI) which has the largest share of accounts in India.
As per information on the website of Sahamati, a not-for-profit self-organised collective for the AA ecosystem, SBI is in the testing mode.
The ecosystem is also working on linking accounts of Small and Medium Enterprises as only individual current and savings accounts are linked currently. Insurers are working on integrating too and the next step will be to get mutual funds on board.
CAMS, FinVu, NADL and OneMoney have launched AA app and website interfaces for customers to use.
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