Rise of Digital India
India is going through a massive digital transformation in all spheres fast blurring several traditional divides. With the launch of Digital India campaign by the Government and the birth of JAM trinity, namely Jhandan, Aadhar and Mobile a few years back, the impact of digital has been pervasive, touching lives of men and women, young and old, urban and rural.
The digital megatrend is playing out across sectors – retail, financial services, transportation, health care, education, farming, manufacturing forcing businesses and enterprises of all sizes to re-script their business processes to ride the digital wave. The largest service provider, the Government has rapidly adopted digital and we are seeing a transformational change in Government-Citizen interactions.
Introduction of the UPI system has brought game-changing influence to the payment industry. The rapid maturity to the payment ecosystem processing almost a billion payments a month and points to adoption by participating merchants and citizens bringing a permanent change to the path to purchase.
Account Aggregators
There is all-round rapid financialization with millions entering the banking sector, insurance, formal credit and a growing preference for financial assets over physical assets.
Financial information of a person is growing with the increased exposure to a wider set of financial products and is held with the respective institution such as Banks, Insurance companies, Mutual Fund, Pension Fund, Housing finance company, etc. Collation and organizing the information for his/her own use and for purposes which seek his financial data remains a time consuming and cumbersome process. The source of information is validated with authorizations and attestations.
Fostering the Digital India drive, RBI has envisioned Account Aggregators platform to eliminate the cumbersome process of collation and sharing of financial data. “Account Aggregation” works on a highly programmable consent given by the customer to share his data with users.
AA, licensed by RBI, works on a mechanism through which a user’s financial information is collated from multiple Financial Information Providers (FIP) and securely sent to the authorized Financial Information User (FIU) with the consent of the customer. The customer has complete control on where he will seek the data from and who he will share it with.
CAMS FinServ, RBI licensed AA will serve 3 stake holders – the customer, Financial Information Providers (FIP), and Financial Information User (FIU) for a seamless fetch and exchange of financial information.
The discovery process in the CAMS FinServ platform will enable the customer to identify his Financial Assets from various FIPs like Banks, Stockbroker, Mutual Funds, Pension Fund, Insurance Providers to name a few. Once he “Discovers” his financial assets, he gets onto the next process of “Consenting to share” with appropriate FIUs. At each step, CAMS FinServ AA notifies the stakeholders on the progress made.
In an ordinary sense, the customer could share his data with FIUs like Lenders. Understandably, the lender would be keen to know the financial health before lending money to the customer.
In another scenario, the customer could offer his data to his Financial Planner/Wealth Advisor/Robo Advisory Firm which can make use of the data and recommend an appropriate Financial Plan for the customer.
Benefits of Account Aggregation
AA brings wide-ranging benefits to customers and businesses which rely on accurate financial information. Few of them are:
- AA provides round the clock access of data to the customer.
- Reduced time for the customer to obtain his financial information from many FIPs.
- Consents are highly programmable and therefore easy to manage.
- Information is sourced from the “Source of Data holders” and no paperwork needed.
- Reliability of the information received through AA is very high.
- Loss of bank statements, financial papers, or tampering with any financial records by handlers will be eliminated.
- Information sharing could be done even every day through CAMS FinServ AA whereas in conventional model this is highly impossible and could be a high-cost activity.
- Loan approval processes become simple and swift with ready information made available to the lender(s).
- Dependency on a third-party agency to get the documents from the customer is removed.
- The overall cost of paperwork will get massively reduced.
A major convenience offered by Account Aggregators is that the users have an option to revoke consent from sharing data permanently or also have an option to “temporarily pause” data sharing. This means that the customer always decides on how long he wants to share data and has the key to stopping it “anytime”.
Security:
CAMS FinServ AA is a very secure platform ensuring end-to-end encryption. The platform can fetch data from multiple FIPs, but is totally “Data blind”, meaning that it cannot store data of any of the financial information of the customer in its system.
CAMS FinServ’s platform acts as the mechanism to enable encrypted data to flow through from the FIPs to the data user. Let’s consider the previous example of availing a loan from a bank – the data shared by the data provider is encrypted and is passed through to the bank (or) the data user via the AA platform. As the data is encrypted end-to-end AA cannot view or download the shared data.
Account Aggregator model is the first kind of financial data access and sharing process with the user’s complete control over the usage of data share to the business entities.
For any further information on the product, services, and features, please write to us at bd@camsfinserv.com. You can visit us at https://www.camsfinserv.com to know more.
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