When it comes to the average person's financial life, managing all of the finances, portfolios, credits, histories and insurances can be a very daunting task. This is where Account Aggregation comes into play.
Account aggregation, also known as Account data aggregation or financial data aggregation in the US, UK and Europe is a way to consolidate all of your financial data, like bank accounts, credits, investments, loans, and other financial accounts, all in one place.
How Does The Account Aggregator Framework Work?
In the AA framework, there are authorised account aggregators who act as intermediaries, collecting your consent and transferring necessary information from providers (FIPs) to Financial information Users (FIUs).
Account Aggregation, even though the term is new to the world of fintech, the concept has already been in use for around some time in places like the US and Europe being known with the name of Open Data.
What Is Open Data And How It Work?
Open Data, is a way to share your financial data in the digital ecosystem by providing third-party financial service providers open access to your banking, transaction, and other financial data from banks and non-bank financial institutions through secure APIs.
Just like how UPI revolutionised the world of finance becoming so popular so quickly, account aggregation also brings you ease and availability just like UPI, with so many people and bank and non-banking institutions coming forward to join in.
Saving you from the hassle of spending hours, if not days, gathering your financial data from different sources, account aggregators can help you get all those information when you need it.
Account aggregators bring in all your bank accounts, credit cards, investments, loans and other financial data into a single place. Making it much easier for you and small businesses to apply for financial services and make financial decisions.
When asked for your data, you as the user will consent a) to the data being shared; b) to whom and why is it being shared; c) for how long the other party will have the access to your data you are sharing.