Credit extension becomes easier if there is account aggregation system. Account aggregators are licensed NBFCs that enable instant exchange of financial data between Financial Information Providers (FIPs) and Financial Information Users (FIUs) with the explicit consent of the customer.

Technology Service Provider (TSP) collaborates with the FIUs and FIPs to deliver Account Aggregator — AA — products and services.

Thus FIP and FIUs are the foundation modules of the account aggregation system. AAs are data-blind as the data flows through the system in encrypted form and can be processed only by FIU for whom it is intended.

Account aggregation is thus a process in which data from many or all of an individual’s or household’s financial accounts are collected at one place.

Account aggregator is RBI-regulated entity that assists an individual in securely and digitally accessing and sharing information from one financial institution to any other regulated financial institution in the AA network. A company can become an account aggregator.

Two common methods of account aggregation are screen scraping or data scraping from one app to another or by establishing direct connections.

Five or six major banks including SBI are expected to go live on AA system by the end of July, 2022. Other PSBs too will soon be onboarded. The focus is on end-to-end Straight Through Processing (STP). Major private banks have already been onboarded on the system. All this will make a big impact on financial inclusion. Many would be able to avail of small ticket loans from banks as banks will have access to the borrower’s verified tamperproof data. Currently, 300 million accounts are enabled on AA. This will increase, and may double as more banks are onboarded.