Eight leading banks have joined the Account Aggregator (AA) network for sharing customers' bank data and also using the AA system for getting new customers. You as a customer of any of the major banks including SBI, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, Indusind Federal, and IDFC First Bank have to give consent to AA for sharing your credit information to get the benefits. Let's look at how it works for you.
Information Exchange Platform
The Account Aggregator licenced by the Reserve Bank of India is like an intermediary or an exchange platform between the banks and institutions sharing the data and also using the data from the system. The platform's job is to consolidate all the financial data in one place and act as an information custodian for a customer. Take, for instance, any bank, insurance company or mutual fund sharing the data with AA will only be allowed to access the data from the system. So your bank and financial institution have to be a participant in one of the AAs, which is operational in the market.
No paperwork or KYC
Once your bank or institution provider is registered, the process of sharing the data becomes easy as the institution is connected with the system of AA by way of APIs. For example, if you need a new loan or want to buy an insurance policy or invest in a mutual fund, you don't need to submit any documents for KYC. You just have to give your consent to AA for sharing your data with banks and institutions. The AA will pull the data digitally from your bank and provide it to the bank or institution where you are applying for a new loan or investment.
Safe & secured
If you are worried about your data being open for anyone to use or misuse, the AA framework has very strict data privacy guidelines. The data shared by the AA will be fully encrypted from your bank to the institution you are approaching for a new loan or any other entity for a financial product.
You control data sharing
As a customer, you will have full control over the amount of data you would like to share on a AA platform and also decide the time frame for which the data sharing will be open for any bank or financial institution to pull from the system. You may also decide to share only the loan details or not the credit card details, etc. The institution giving you a loan, however, has other information intermediaries like a credit bureau to get additional information on you.
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