A strategy to ensure growth of the account aggregator ecosystem: RBI

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The account aggregator ecosystem in India is in its infancy, and it requires careful growth, according to Reserve Bank of India deputy governor M Rajeshwar Rao.

Account Aggregators (AA) are companies that allow financial data to be shared between Financial Information Providers (FIPs) and Financial Information Users (FIUs) with the consumers’ permission.

The account aggregator ecosystem is still in a nascent stage of development. But given the sensitivity of the platform on account of the nature of data handled by it, it becomes imperative to ensure that the growth is orderly,” Rao said while speaking at iSPIRIT Foundation event.

Through standardised APIs, AA works as a middleman and connects the customer to multiple Financial Information Providers (FIPs) (Application Programming Interfaces).

CAMSFinServ, Cookiejar Technologies Pvt Ltd, FinSec AA Solutions Pvt Ltd, and NSEL Asset Data Ltd are among the account aggregators that have got RBI permission.

As the business of account aggregators grows, the deputy governor believes it will be possible for different types of financial institutions under the jurisdiction of different financial regulators to communicate with one another via their respective technology platforms.

While the RBI welcomes and supports innovation, he pointed out that a balance must be struck between innovation and the spirit of the account aggregator regulatory structure.

“We do support innovation in financial space, but the support and encouragement will be done while ensuring that we develop and grow a robust financial system to support a vibrant and growing economy,” Rao said.

He believes that in order to provide a smooth and secure flow of data between account aggregators and financial information providers, some generic technical standards should be established for account aggregator ecosystem players so that data is really authorised and protected.

The account aggregator’s overall purpose is to empower customers and decrease information asymmetry. According to him, the goal is to ensure that the consumer has complete control over the information given through the account aggregator.

Only when a variety of client accounts are maintained across different financial institutions and financial sector regulators are linked to the account aggregator will the systems perform optimally.

“For this to happen, the information providers need to see value in the framework. This, in my view, is a key to the development of a viable business model for the account aggregator ecosystem in India,” he added.

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