When a billion Indians took a big step towards a better financial future

Sahamati announced earlier this month that all major private and sector banks are online on the Account Aggregator (AA) network. This is a significant milestone as this decision alone has brought almost a billion Indians closer to better access to a host of financial services ranging from credit to investments and more.

This achievement did not come at once, it was years of effort by almost all financial regulators in partnership with private actors that brought us here. The AA Framework was conceptualized as a platform to give individuals more control over their financial information while enabling transparent and secure access to that data for regulated entities within the AA ecosystem.

Simply put, the AA Framework is digital infrastructure like virtual rail lines creating a more connected financial ecosystem with the individual at the center. The whole flow of information in the AA network depends on the person’s explicit consent to share their financial data for a specific period. Consent can be revoked at any time. This design offers endless possibilities for improving financial services and many benefits for individual customers.


AA can not only improve access to credit, but also enable cheaper loans. Customers without a formal credit history often find it difficult to obtain favorable loan terms, even though they may have an excellent track record in other aspects such as paying bills. When approaching lenders, clients have to submit a multitude of documents, which can be a cumbersome process.

Through an AA, customers can simply grant access to all required data to a lender. For lenders, this eliminates the need to deploy resources to manually sift through physical documents, reducing the cost and time needed to assess credit and make loans.

Wealth management

Just like the loan application process, clients must submit a series of documents and information to wealth management companies to avail of their services. With the data available through the account aggregator, wealth management companies can make faster and more accurate assessments of a client’s financial situation. This will result in better financial advice for clients.

personal finance management

Managing your own finances can be a complicated task. Having multiple bank accounts can make it even more important. When balances and expenses are fragmented across different accounts, it can give an incomplete picture of your overall finances.

Linking multiple bank accounts through AA gives customers a complete view of their finances in one place. They get a clear picture of total expenses and balances, which will help with financial planning. If clients choose to share other financial data such as investments, assets, and liabilities, they can even get an accurate net worth figure.

Fraud detection and prevention

The reach of financial fraud on unsuspecting customers is growing with the growth of digital payments and other financial services. Currently, banks and financial institutions each have their own security measures in place that do not necessarily communicate with each other. Through the AA Network, a security agency can provide real-time monitoring and fraud prevention services in banks and financial institutions, improving security standards for the entire industry.

Data security

From credit to investment advice to personal finance management, most financial services require customers to share information. Some service providers rely on less secure data collection methods, such as screen scraping or reading customers’ SMS data. These processes are more vulnerable to data leaks and abuse.

The AA Framework provides a secure way to share only required information with the specific regulated entity to which the client gives consent. When requesting information from a customer, a regulated entity must mention the type of data it is seeking, the purpose for which it will be used, the period during which the data sharing will be valid and for how long it will retain the data. data. The customer can also revoke their consent at any time, interrupting the data sharing process.

Along with this, the regulations specify that the data must be end-to-end encrypted and that account aggregators, which facilitate the flow of data, cannot store the information to mitigate leaks and abuse.

These are just a few of the benefits AA provides to nearly a billion people and counting. The greatest impact for all of these people will occur when these public and private banks integrate with all of the account aggregators in the AA ecosystem.

(Sumit Gwalani is co-founder of fintech company Fi Money)

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