Page 44 - Banking Finance January 2024

ARTICLE

as these offices/ institutes provide
consumer data through the AA pipeline.
4. Financial Information Users (FIU):
Institutes that provide personal finance
management, flow-based credit, and
wealth management services like Banks,
and NBFC are users of these data. The
inbuilt framework allows users/
consumers to choose whom to share
data with, what data they want to share,
for what time period, and for what
purpose and revoke. An FIU can also be
an FIP or vice versa.

(Source: https://sahamati.org.in) How it works:

User Consent: When a user wishes to share their financial
Process flow:
information with a third-party
application or service provider, they
grant their consent to an Account
Aggregator (AA). This consent can be
granted through a digital platform or a
mobile application.

Data Request: The third-party service
provider, such as a FinTech app or
lending platform, initiates a data
request within the Account Aggregator
ecosystem. They specify the specific
financial data they require.
This model contains four parties:
1. Consumer: A Consumer has his/ her bank account with Data Retrieval: The Account Aggregator then retrieves the
a bank, Insurance policies with the insurer, investment requested financial data from the user's financial institutions,
portfolio with MF houses, and if a businessperson, must which can include banks, mutual funds, insurance companies,
be filing GST. Through API (Application Programming pension funds, etc. also known as FIP (Financial Information
Interface), which can be thought of as a contract Providers)
interface between two applications, a consumer gives
consent to share data through Account Aggregators. Data Sharing: Subsequently, the financial data is securely
2. Account Aggregators (AA): These institutions act as transmitted from the Account Aggregator to the authorized
FDAF ( Financial Data Access Fiduciary) or in simple third-party service provider. Secrecy in these data transfers
language Consent Managers. They simply allow users is governed by guidelines of ReBIT (Reserve Bank
to share the data with Financial Institutions/ Service Information Technology Pvt Ltd.)
Providers in exchange for Insurance, easy access to
credit and other financial products, or even for simply Data Analysis: The FIU can utilize this data for in-depth
tracking one's investment portfolio. analysis, enabling them to offer tailor-made financial
3. Financial Information Providers (FIP): Institutions like services or products to the user. This may involve assessing
Banks, Mutual Fund houses, Insurance Providers, and creditworthiness for loans or recommending suitable
Tax/ GST platforms are categorized in FIP in this model investment opportunities.

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