Bank account aggregation software is a type of software that collects financial information from various sources, such as banks, credit cards, and investment accounts, and combines them into a single platform to provide a comprehensive picture of a person’s finances that is easy to research and analyse.
It already has the most banks on its platform thanks to the frequent addition of PSU banks. By implementing the bank account aggregator app, the Reserve Bank of India (RBI) has effectively narrowed the gap between the demand and supply of retail lending in India. With or without a credit history, a large proportion of consumers can now get loans. In 2016, the RBI authorised a new category of non-banking financing companies that can act as account aggregators. The framework was enhanced over time with a greater understanding of AAs, and as a consequence, it was made public in September 2021.
Aggregating financial accounts provides a data architecture that is scalable, interoperable, and extensible, setting it to become the UPI of data. A top-notch platform is necessary but insufficient to deliver economic value on its own. Success will depend on the creation of new products, use cases, customer experiences, as well as the redesign of processes that encounter data friction. At Perfios-AA, the team has been working closely with FIs that are ready to join the ecosystem for bank account aggregator apps to ensure that their current practices may be modified to benefit from it.
Which parties make up the account aggregation ecosphere?
- The client’s financial account holder, also known as the end user or data principle, who holds an account with a bank, an AMC, an insurance company, etc.
- The PFRDA, the Reserve Bank of India (RBI), the Securities Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Reserve Bank of India (RIB) may all regulate a FIU as a regulated institution.
- FIUs participate in FIPs bank account aggregation (AAs), permitted organisations that help Data Principals securely access their data held by FIPs and share that data with FIUs of their choosing.
So what distinguishes Anumati?
Despite the RBI only awarding six AAs thus far, Anumati now leads due to three important advantages.
A market leader in data extraction, aggregation, and analysis for more than 250 financial institutions, Anumati is a branch of Perfios bank account aggregator app. It speaks the FIU language with ease. The team understands what is required to make obtaining access to and exchanging sensitive data with FIUs and clients a smooth and secure experience. With 15 FIPs currently active and more on the way, Anumati is the largest single network of FIPs and accounts for more than 40% of all retail and SME accounts. Once they are able to communicate directly with the PSU Banks who are willing to join the network, this figure will dramatically rise. Some of the strategic investors in Anumati are the likes of HDFC Bank, ICICI Bank, SBI, and Bajaj Finserv.These organisations are committed to seeing Anumati grow into the largest and most dependable data network in the nation. Together, they make up the foundation of India’s bank account aggregation system.
The team believes that the AA use cases listed below would considerably improve the FIs’ user engagement, business processes, and sales models.
Possibility of implementing Derived KYC via AA
Consider a scenario in which a FI’s AML and Compliance teams can only approve Derived KYC based on the customer’s KYC-related parameters after they are acquired using the bank account aggregator app data fetch mechanism (for banking data). This option might only be available for certain risk types and loan terms that are allowed by the FI’s policies. The use of Derived KYC will streamline the client onboarding process and lessen the possibility of fraud because the data will be retrieved by a controlled mechanism without any human contact or manipulation. It is expected that this method to be a game changer for the industry given the expense and time involved with the FI carrying out KYC (all sorts of KYC included).
Accessing GSTN data through AA GSPs is now a possibility for those involved in the AA ecosystem
A few issues, such as the consent capture period not being limited to just 30 days when data is fetched via bank account aggregation or the use of an easier method to obtain user consent rather than API enablement, remain unresolved due to the complexity and subtleties of a nationwide implementation of this order.
Benefits of account aggregation software
There are many benefits to using financial aggregation software, including:
1. Financial Viewpoint
The fundamental benefit of bank account aggregator app is that it allows clients to monitor and access their account information and financial insights in one location, anytime they wish. Better insight leads to more educated decisions, which enhance relationships and open up more prospects for revenue growth.
2. Less inquiries and research
Online access to up-to-date information eliminates the need for manual data collection, updating, or filing, which improves teamwork, reduces consumer confusion, and saves a tonne of time.
3. Better Services
By providing you with a complete, unfiltered image of your clients’ financial situation, provisioning and revenue bank account aggregation software allows you to observe “held-away” assets and provide more extensive advice and guidance to your clients.
The potential for embedded finance
Through the implementation of the OCEN Framework, participating financial account aggregation institutions (FIs) and market/e-commerce (Loan Service e2Providers) participants will grant consent-based access to verified data from numerous public and private data sources, thereby offering customers low-cost credit. Thus, the development of Embedded Finance on the platforms of the Loan Service Providers and the production of cost-efficient yet profitable solutions by the bank account aggregator app. The advantages to the Loan Service Providers include low acquisition costs, access to private information, understanding of the intended use of the extended credit, and management of the payment flow. These factors might entice loan service providers to grow and eventually change their roles to become lenders.