Hello friends, in today’s article we will talk about the ‘Account Aggregator’ (AA) network. What is an ‘Account Aggregator’ (AA) network? Knowing about its importance and benefits, account aggregator in India, let’s start.
What is an ‘Account Aggregator’ (AA)?
‘Account Aggregator’ (AA) means a framework that facilitates the sharing of financial information between regulated entities (banks and NBFCs) in a real-time and ‘data-blind’ (the data flowing through it is fully encrypted) provides the facility.
The ‘Reserve Bank of India’ in the year 2016 approved ‘Account Aggregators’ as a new class of ‘Non-Banking Financial Companies (NBFCs) whose primary responsibility is to transfer the financial data of the user with his express consent. the facility is to be provided.
It enables the flow of data between Financial Information Providers (FIPs) and Financial Information Users (FIUs).
The structure of the ‘Account Aggregator’ (AA) is based on the ‘Data Empowerment and Protection Architecture (DEPA) framework.
DEPA is an architecture that allows users to securely access their data and share it with third parties.
Importance of ‘Account Aggregator’ (AA)
For consumers: The AA framework allows customers to avail various financial services through a single host of providers on a single portal based on a consensus method, whereby consumers can choose which financial data to share And with which unit.
This allows users to control who can access their data, track and log its movement, and reduce the potential risk of leakage in transit.
For banks: In addition to India’s digital infrastructure, it will allow banks to access agreed data flows and verified data. ( account aggregator in India )
This will help banks reduce transaction costs, enabling them to offer smaller loan sizes and more tailored products and services to their customers.
Fraud Reduction: The AA Framework reduces fraud involving physical data by introducing secure digital signatures and end-to-end encryption for data sharing.
way ahead
Going forward, a large number of Small and Medium Enterprises (SMEs) will be accessible without physical branches and this will change the credit penetration.
As we delve deeper into the open banking system, it is known that surprisingly, India talks about credit and other financial products. Awareness and adoption of ecosystem-level will take a big blow to it.
The AA framework can be extended to handle data from other domains as well, such as data related to healthcare and telecommunications.
However, if unlicensed entities are to be allowed, the data framework confidentiality is important as RBI currently only protects financial data within its mandate.
account aggregator in India,
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