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What is an Account Aggregator? A Complete Guide

Account Aggregator

Data is in everything and everywhere. Unlike in the past, when we needed a powerful machine to generate and store a few megabytes of data, we are currently generating ever-increasing amounts of data. According to a Business First Magazine report, by 2020, everyone will generate 1.7 MB of data per second. Furthermore, Internet users now generate 2.5 quintillion bytes of data every day worldwide. The best part is that businesses have discovered useful ways with the help of account aggregator to use this data to make better decisions.

Most market differentiators, across industries, are determined by how effectively a company uses the data it has access to from a variety of sources to achieve effective results. Especially in the financial services industry, where customers want speed, security, and convenience, decisions need to be made based on data. This is where the framework for combining accounts comes in. Let’s start by delving deeper into this account aggregator framework.

What is an Account Aggregator framework?

In 2021, the Reserve Bank of India (RBI) introduced the Account Aggregator (AA) Framework to make financial data more easily accessible through data intermediaries (account aggregators). These intermediaries oversee collecting users’ financial information from various entities (Financial Information Providers or FIPs) that hold customer data and share it with entities requesting data (Financial Information Users or FIUs) with the user’s consent.   

For example, if a person in India wishes to apply for a loan, the lending bank (FIU) will require access to the financial statements saved at the user’s bank side (FIP) to assess his or her creditworthiness. This will be straightforward under the AA framework.   

Meanwhile, this account aggregator framework gives end users significant control over their financial data. It is a progressive step towards assisting consumers in reaping multiple benefits from the use of their data.   

  • It will enable the efficient and secure sharing of financial data, lowering transaction costs and the risk of financial fraud. 
  • It will allow users to quickly gain access to a variety of banking services at a reduced cost. 

account aggregator

Account Aggregator participants 

The Account Aggregator (AA), Financial Information Provider (FIP), and Financial Information User (FIU) are the main participants in the AA ecosystem, working together to simplify the process of data sharing 

1. FIP (Financial Information Provider) 

Institutions that hold user data are known as Financial Information Providers (FIPs). These are the banks or non-bank financial companies that share customer financial information with Financial Information Users (FIUs) via Account Aggregators.   

A FIP, as part of the AA ecosystem, can assist by,   

  • Making it simple for customers to access historical data   
  • Assisting customers in using innovative new financial services in a convenient manner   
  • Bringing new and diverse products to market 

2. Account Aggregators   

AA are non-banking financial companies licenced by the RBI that act as a bridge between Financial Information Providers (FIP) who hold your personal or corporate financial data and Financial Information Users (FIU) who provide financial services to you.   

Account Aggregators provide users with data by,   

  • Giving them access to their financial data   
  • Information sharing in real time   
  • Improved and faster access to a wide range of new-age financial services   

3. FIU (Financial Information User)   

Account Aggregators deliver digitally signed data from Financial Information Providers (FIP) to Financial Information Users (FIU). The data is used by FIU to provide various services to consumers such as loans, insurance, and wealth management.   

As part of the AA ecosystem, an FIU can use customer financial data to,   

  • Give customers immediate access to new products and services.   
  • Accelerating the approvals process   
  • Provide more extensive services across spectrums.   

Advantages of the AA framework

Just as UPI revolutionised payment, AA can provide financial services such as loans and credit.

Using the existing digital infrastructure, we can make facilities much more seamless and accessible to everyone.

  • Hassle-free – AA makes it simple for users to collect data and service providers to enter data.
  • Fast – AA allows for faster processing and access to products and services.
  • Comprehensive – With your entire financial profile in one place, service providers can better assess your needs.
  • Real-Time – Each synced account’s information is up-to-date and accessible online, reducing the possibility of errors.
  • Verified – Financial data is delivered directly from authorised accounts, reducing data errors.
  • Transparent – Aggregation improves transparency by providing a clearer picture of your finances.

How does the Account Aggregator framework work?

To make credit available to borrowers, banks and NBFCs generally follow a predefined process. It consists of several steps, including regulation, identity verification, credit risk assessment, and others. Because they also consider the borrower’s credit history, it becomes difficult for first-time borrowers or those with no financial history to obtain affordable credit.

The account aggregator framework will aid in establishing the creditworthiness and repayment capacity of such borrowers by utilising well-defined data sources to earn the lender’s confidence. This is distinct from relying solely on bank statements to determine a new borrower’s income profile.

Use cases of Account Aggregator

According to reports, the amount of transactions (transfers of bank statements) through AAs is projected to reach 5 billion by 2027. This, however, is only an estimate of the potential transfer of bank statements.

The framework is much broader than simply sharing bank statements. It is because it involves the sharing of a user’s financial data (investment, insurance, card details, etc.) via a tamper-proof system. FIPs (Financial Information Providers) and FIUs (Financial Information Users) share it.

As a result of such data sharing, many new use cases emerge, and as new users are granted AA accounts, new use cases emerge.

Let’s take a look at some of the most common account aggregator use cases in various industries.

1. Financial services industry

One of the most common and significant industries to use AA services is the financial services industry. The account aggregator framework has already been proven to benefit MSMEs and underserved populations in the country.

2. Lending services   

In India, peer-to-peer lending, digital banking units (DBUs), microlending, POS (Point-of-Sale) lending, and other modern credit services are available. These modern lending services can provide customer-oriented services in addition to traditional lending services. All thanks to AAs simplifying financial data sharing.

Lending services, whether provided by a bank, financial institution, or non-banking organisation, will be streamlined. The AAs’ data sharing will make it easier for users to access their critical financial information.

3. Wealth/personal finance management

Wealth and personal finance management services have advanced thanks to account aggregators, as customer onboarding time has been drastically reduced. It has been reduced from many days to a few hours and, in some cases, a few minutes.

Financial service firms can offer tailored wealth management services to their clients using the account aggregator framework’s consent-based data sharing.

4. Account reconciliation

AA can retrieve bank statement details in real-time, making reconciliation of bank accounts, supplier accounts, and customer dues much easier. Companies can use AA-enabled accounts to check in real time whether a specific transaction is reflected in the bank statement.

5. Neo-banks

By 2030, India’s neo-banking market will have grown 281%. It will account for 9% of the total fintech market. As a result, the future of neo-banks appears promising.

As a result, the most important aspect of their growth will be information exchange via AAs.

AAs can help these businesses onboard customers more smoothly, link banking information, update financial data in real-time, and have a centralised system to manage all finances.

account aggregator


According to the FIUs, the account aggregator framework will make credit risk assessment easier, more accessible, and cost-effective. As more people join this ecosystem, new customer use cases will emerge. Individuals will not be the only ones who stand to benefit from this framework; micro, small, and medium-sized enterprises that are looking for loans to expand their businesses will do so as well.


1. What is an Account Aggregator?

Ans: The account aggregator is an RBI-regulated entity with an NBFC-AA license that assists individuals in gaining digital access to and sharing information between financial institutions. Data sharing occurs with the individual’s permission.

2. How will the AA network benefit the average man’s life?

Ans: It is currently difficult to justify a user’s financial history to a third-party institution. It entails sharing bank statements – both physical and electronic copies – notarising the documents, and much more. All of these steps are being replaced by the AA network with a simple, digital data-sharing process.

3. What types of information can be shared across the AA network?

Ans: Banking transaction data is mostly available for sharing among the network’s already-operational banks.

4. Will the AA framework have an impact on data privacy?

Ans: Account aggregators do not have access to the data and only transfer it from one financial institution to another with the individual’s permission. The process is far more secure than sharing physical copies of documents because the data shared is also encrypted.

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