Customers “should not have to choose an account aggregator (AA) based on which institutions it happens to be connected to,” said BG Mahesh, CEO of Sahamati, addressing the Reserve Bank of India’s (RBI) recent press release announcing interoperability among AAs. The change is expected to be implemented by December 31, 2026.
This means that, after implementation, users would not have to choose an AA based on which AA their bank is connected to or partnered with. Mahesh further added that not needing a second or new AA handle is “the fundamental promise” of interoperability. However, whether existing handles and consents will carry over will depend on the final implementation framework, he said.
For context, AAs are non-banking financial companies (NBFCs) licensed by the RBI that act as a consent-based data-sharing bridge between institutions that hold a customer’s data, called Financial Information Providers (FIPs), such as banks, and those that need it, called Financial Information Users (FIUs), such as lenders, registered investment advisors (RIAs), stockbrokers and insurance companies.
To understand how the AA industry views the RBI’s announcement, MediaNama sent written questions to Sahamati, the RBI-recognised self-regulatory organisation (SRO) for the AA ecosystem, and spoke to its CEO, BG Mahesh. Below are Mahesh’s responses, edited slightly for brevity and clarity.
Why do you think this interoperability feature is required? What is the problem that could be solved because of this?
“If an FIP works with one account aggregator, there is no additional code for it to write to work with additional AAs. But the operational, legal and compliance burden of onboarding more and more account aggregators was huge. For the large ones especially, they had to go through a full process that would take three to six months to onboard another account aggregator.
Technically, it can be onboarded within half an hour. But there was a lot of legal compliance, because the bank would be opening up to traffic from another account aggregator. So that bank has to conduct the technical audit, security audit and so on of that account aggregator, even though it is already a regulated entity.”
“The bigger shift here is from institution-centric connectivity to customer-centric portability. India’s digital infrastructure has shown that interoperability can dramatically simplify the consumer experience. AA can now take that principle into financial data: the customer chooses the AA app’s interface, gives consent, and the infrastructure does the work of connecting the ecosystem behind it. That is what can take AA from a successful consent mechanism to a foundational layer of India’s digital financial infrastructure.”
How might AA interoperability work? Should every FIP connect to every AA, or will AAs connect to each other and route requests?
“Interoperability should be judged by the outcome, not the underlying topology. The customer should be able to choose an AA and access financial information across the ecosystem, irrespective of the connections between individual FIPs and AAs. Whether this is achieved through the current model of direct connections between FIPs/FIUs and AAs or through another architecture is ultimately a technical design choice.”
While interoperability can make data flows smoother for banks and lenders, what are the benefits for end users? For instance, would users no longer need a new AA account each time they apply for a bank loan that uses a different AA?
“That is the fundamental promise of interoperability. Customers should not have to choose an AA based on which institutions it happens to be connected to. The treatment of existing handles and consents will depend on the final implementation framework, but the guiding principle should be continuity of customer choice and consent.”
Can users still hold more than one AA handle?
“You can, if you want. You may want to use only one account aggregator, or you may use three or four. But with interoperability, you are not forced to open more and more AA handles. As of today, you are forced to, because your particular bank, as an FIP or FIU, works only with select account aggregators, so you have to open an account with them. Going forward, you can still have, say, eight accounts, but you will not be obligated to open more and more AA handles, because with one handle itself you are able to do what you want.”
When a request involves more than one AA, who holds the consent record, and who is responsible for failed fetches, errors, grievances or data incidents?
“Every consent and data-sharing transaction must remain traceable, with clear responsibility at each stage of the journey. The operating framework should make it unambiguous who is accountable for the consent, the request, the data flow and the customer grievance.”
How will AAs be paid for requests involving more than one AA, and will interoperability change how AAs compete?
“Interoperability should fundamentally evolve what AAs compete on. Connectivity becomes a mechanism to connect and share or route user information, while differentiation can increasingly come from customer experience, trust, reliability, innovation and the ability to build useful financial services around consented data. The commercial model will have to be worked out by the AAs, with a focus on ensuring that the model supports customer choice and the continued growth of the ecosystem.”
Is December 31 a realistic deadline? What is the biggest hurdle, and who should bear the integration cost?
“The timeline is achievable if the ecosystem keeps the customer at the centre. The bigger challenge is coordination across technology, standards, testing and operational processes.”
“Even before the specs come, why should we say that it won’t be possible by December? Let it come. The ecosystem wants to work towards consumer convenience. That commitment from us has to be there. Once the specs come, we will be able to say whether it is possible or not. But from what we have seen, the changes are not huge.”
When can the industry expect the rules and technical specifications?
“I do not know. But I expect it to be in the near future”
Also Read
- RBI to make account aggregators interoperable
- Account Aggregator ecosystem goes live with 8 banks and multiple fin-tech firms
The post Users won’t need to open multiple account aggregator handles under RBI’s interoperability plan: Sahamati CEO appeared first on MEDIANAMA.