Account aggregators see greater adoption by investment industry

To be sure, the AA network aims to empower millions of consumers with greater access and control over their financial records and expand the potential pool of customers for lenders and fintech companies.

Such financial data—pertaining to tax, pensions, securities (mutual funds (MF) and brokerage), and insurance— cannot be shared without the consent of the individual concerned. It will also expand beyond the financial sector to allow healthcare and telecom data to be accessible to individuals.

The AA framework aims to bring banks, insurers, registrar and transfer agents (RTAs) like CAMS and KFintech, depositories—all regulated financial entities —onto a single platform to allow seamless sharing of financial data of investors after getting their consent.

Currently, the banking sector— comprising banks and non-bank financial companies (NBFCs)—accounts for 74% of all data transfer consent, particularly where it pertains to retail and MSME (micro, small and medium enterprises) lending use-cases. The securities market is next, with 25% of such data transfers mainly for personal finance management and demat account opening.

Sahamati, a non-profit organization that is putting in place standards and codes of conduct for the AA ecosystem, has in a report estimated that the share of banking sector will settle down to 58% by 2027. The securities market will see significant growth in data transfers, primarily for personal finance management, wealth advisory and demat account opening. Its share is estimated to climb to 42%.

These numbers shed light on the benefits of the AA ecosystem for the investment industry.