The Reserve Bank of India's Deputy Governor M Rajeshwar Rao on September 2 said the larger goal of the account aggregator (AA) framework is to address information asymmetry.
Rao was speaking at the Account Aggregator Ecosystem Go-Live event organised by the iSPIRT, Bengaluru-based think tank.
AAs are licensed entities which act like a bridge between financial information providers (FIPs) like financial institutions and share data with Financial Information Users (FIUs) like digital lending institutions, wealth management companies.
Rao said, AA assists in decision making of provision of financial services like wealth management, credit, insurance, etc. AAs can facilitate access to financial services to the underserved and unserved segments by addressing information asymmetries, he added.
He adds, data will be shared in a tamper proof and secured manner bringing down costs and hassles for customers.
A good piece of regulation can come to a knot if the desired objectives of the regulation are not met. The desired objective in the case of account aggregator ecosystem will be attained when a large number of customers and information providers (banks) are onboarded on the account aggregator platforms and they are able to get aggregated data in a formed manner desired by users in a completely safe and secured environment, Rao said.
For this to happen, information providers need to see the value in the framework. This is key to the viable development of the business model of the aggregator ecosystem in India, he added.
Rao said the approach was to make sharing and aggregation of data in a safe and consent driven manner through account aggregators registered as NBFCs with RBI. AAs transfer data between FIU and FIP on consent of the customer and they can’t own the data or process the data and have proper audit trails, he added.
He emphasised on the importance of information providers and information users to tap into the vast potential of this innovative platform. Systems will function optimally only when varieties of customer accounts maintained across different financial entities cutting across financial sectors are linked to the account aggregator.
Adding, to ensure seamless flow of data, there should be a need for generic technical standards. It should aim to understand there is smooth and consent driven flow, interoperability is ensured, integrity is enforced and scope of future development is not restricted.
Reserve Bank Information Technology Private Limited (ReBIT) has come out with Open API technical standards, the key features ensure the design of AA is data blind and allows interoperability and layered innovation. Explicit and electronic consent are progressive and pre-emptive in nature and customers have full control over his data, he added.