The AA network has gone live. AAs are the licensed non-banking finance companies (NBFCs). They facilitate exchange of financial data between financial information providers (FIPs) and financial information users (FIUs). This is done with the express consent of the customers.

Financial information providers (FIPs) are banks, mutual funds, pension etc. FIUs can access the data from these sources by requesting AAs.

Financial information users (FIUs) would use the data to offer financial products and services to their customers. These are registered entities. ( say by RBI, IRDAI, SEBI or PRDA. FIUS can be banks, lending institutions, AMCs. An FIU is also an FIP to sustain the system.

At present, the four AAs are FinVu, OneMoney, CAMS FinSerV and NADL. Perfios, PhonePe and Yodlee Finsoft have received in principle approval. As we have observed already, eight banks have joined AA ecosystem as FIPs. Some banks have already gone live. GSTN is expected to go live on AA shortly.

AA acts only as a conduit or channel between FIUs and FIPs. AA is data-blind. The data that flows through it is encrypted. It can be decrypted only by the FIUs. AA cannot store any user’s data.

AA leads to democratisation of credit. It quickens the pace of disbursement of the loans. It simplifies the process of lending. It leverages the digital footprints. It is economical as it reduces transaction costs. AA system can be extended to the health care sector.

AA is IT-driven and secure. All the three components of the system — FIUs, FIPs and AAs are regulated.