Control the data you share when applying for loans online

6 MinsSep 05, 2022

If you think of digital technologies, one of their most significant benefits is the ability to aggregate data from different sources. In financial services, this cutting-edge technology is what brings about speed, safety, security and convenience. The need for better data aggregation has given rise to the concept of Account Aggregators.

Control what and how much data you share

In September 2021, India launched the Account Aggregator (AA) network. It has been poised as a system of financial data-sharing that can transform the credit and investing space. Millions of people will have greater access and control over their financial information. For lenders and fintech companies, the AA network could expand the potential pool of customer information.
With this at the backdrop, Account Aggregators have the potential to empower individuals with access and control over their financial data, increase open banking in the country and empower millions to share financial information digitally, securely and efficiently.

What is an Account Aggregator?
 An Account Aggregator is an entity regulated by the Reserve Bank of India that allows individuals to digitally access and share their financial information from one financial institution to another. It increases the security of the transfer because it cannot happen without the individual's consent.
In essence, Account Aggregators will help replace "blank cheques" in the system and instead, introduce a granular and step-by-step mechanism for individuals to transfer information. Currently, the RBI has included eight large banks in the country in the Account Aggregator network. These include Axis Bank, Federal Bank, HDFC Bank, ICICI Bank, IndusInd Bank, IDFC First Bank, Kotak Mahindra Bank and State Bank of India.

How it is different from existing data sharing mechanisms
You may wonder how information transfers with the help of Account Aggregators differ from the information network of Aadhaar eKYC and Credit Bureau Data sharing or even platforms such as CKYC.
Aadhaar eKYC and even CKYC share data specifically for KYC reasons, including identity data fields such as name, gender, address, etc. Credit Bureaus share information limited to an individual's loan history or credit score. Account Aggregators will allow transaction information to be shared – including savings accounts, current accounts and deposit accounts.
The system is being developed to share other financial information, such as tax and pension data, data from mutual funds and brokerages, insurance data, and other kinds of financial data. The Account Aggregator network will also go beyond the financial sector to enable healthcare and telecom information to be shared across the network.

You can control your data 
A customer or an individual has complete control over the information shared. Registering for the Account Aggregator system is voluntary for individuals. If your bank is in the AA network, you can choose to register under the network or choose to opt out. You can also select which accounts you want to link and what data you want to share with a lender or a financial institution, among other things. The underlying point here is that customer consent is compulsory.
You can also revoke consent at any time. If you have agreed to share data over some time, say the duration of a loan, you can revoke this permission at any point during that time frame.

[Also Read: 24x7 Personal Loans made easy with Account Aggregator]

While giving consent, you will also know the exact period for which the recipient institution will have access to your information. This ensures complete transparency.

How to register for Account Aggregator data sharing? 
You can register for Account Aggregator data sharing via the AA network's apps or website. You will be assigned a handle, like a username, that you can use when giving consent. As of now, four apps are available through which you can give consent – CAMS Finserv, Fnvu, NADL and OneMoney. Three more apps are in the process of getting approval – Perfios, PhonePe and Yodlee.
In the statement that you upload on the server, the document should be in ePDF format and should be an e-statement downloaded from Internet Banking or Mobile Banking. Avoid uploading the mini statement.
The case may be declined if the bank statement is edited, scanned or has missing transactions. For Netfetch transactions, you will need to use the proper Net Banking credentials of the salary bank account.

Are the services charged?
Whether or not you will be charged for the Account Aggregator data sharing depends on the financial institution in question. Some are free because they charge the other financial institution directly. Certain others may charge a small fee.

Some of the key statistics associated with Account Aggregators
The Account Aggregator network has proven to be highly successful. About 45% of customers are opting for an Account Aggregator on the income assessment page. The average journey time is around two to three minutes. According to Perfios insights as of June 2022, Account Aggregator transactions have exceeded that of Netfetch and are now officially the most preferred mode for end users. 40% of customers are going ahead with the Account Aggregator journey v/s 17% for Netfetch and 41% for statement upload. Account Aggregator network is currently live with nine banks.
Account Aggregator has been developed to allow secure and efficient transfer of information from one financial institution to another. The entire network has been designed with the customer experience in mind. You can be assured of safety and compulsory consent when sharing your data.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.