We have heard people say this before, that data is the new oil, but in today’s digital world, it is at the core of the financial ecosystem. Every time we do a bank transaction, invest in a mutual fund, buy insurance, or apply for a loan, we create a financial data trail. This data will help institutions analyse behaviour and offer faster services, personalised products, and quicker credit decisions. The challenge, however, is that our data sits in silos, in different institutions. One bank has our savings data. Another platform has our investments. An insurer has our insurance policy details. When we apply for a service, we often have to download statements and upload PDFs. It is slow, tedious and inconvenient.
How the Account Aggregator framework works
This is where the Account Aggregator (AA) framework steps in and makes a world of difference. Introduced by the Reserve Bank of India (RBI) in 2016, the Account Aggregator framework is a consent-based system for sharing financial data. It allows secure, real-time sharing of financial information between regulated financial institutions. The most important feature is that the individual owns the data, not the data provider. The individual decides who can access the data, for what purpose, and for how long. Consent is clear, specific, and can be withdrawn at any time.
In this system, data moves from a Financial Information Provider (FIP), such as a bank, mutual fund house, insurer, or pension fund, to a Financial Information User (FIU), usually a lender or financial service provider. In this process, the Account Aggregator acts as a regulated intermediary. It transfers the data securely to the FIU; however, AA does not have the authority to store/ view any of this data transmitted through them. The framework covers many types of financial data, including savings and current accounts, fixed deposits, GST records, mutual fund investments, insurance policies, etc. This data is shared in a structured, machine-readable format through secure APIs. This removes the need for physical paperwork and manual document uploads, eliminating errors and delays.
Why this is a turning point for credit and inclusion
The benefits are practical and visible as the framework enables faster digital processing across the financial services. Lenders can access Bank statements, GST filings, and cashflow data instantly with consent. Credit decisions that depended on borrowers sharing their bank statements can now be made much faster. This is especially true for first-time borrowers, who are new to credit or have limited credit history, as cash flow data can help lenders assess their ability to repay. For micro and small enterprises (MSMEs), this is especially helpful. Lenders can use real-time transaction data to offer small loans based on actual business cash flows rather than relying solely on collateral. This improves access to credit for micro, small, and medium-sized businesses.
Financial institutions have started implementing advanced AI and machine learning tools at various stages of application processing. These tools are used for credit decisions, fraud identification, and improving customer experience. The Account Aggregator framework also supports AI and machine learning. Advanced analytics models require clean, structured data to work effectively. By providing standardised, machine-readable data from multiple sources, the framework helps financial institutions make faster and accurate decisions. It also strengthens fraud detection and enables monitoring for suspicious activities. Security is built into the design. Data is shared only with explicit consent. It is encrypted end-to-end during transfer. This ensures a high level of data protection.
The Account Aggregator infrastructure is growing rapidly. Today, over two billion financial accounts are eligible to be linked to the system, and millions of consent-based data-sharing transactions have already taken place, helping build a digital-first financial ecosystem. The framework has replaced slow, manual, PDF-based document sharing with structured digital data, enabling lenders and other financial service providers to deliver services faster, with fewer errors in assessment, and to lower the cost of application processing.
In the recent Union Budget, the Account Aggregator framework, along with AI and machine learning, was highlighted as an important pillar of India’s digital public infrastructure, recognising its growing role in the country’s financial system. At its core, the framework shifts control from institutions to individuals, putting people in charge of their own financial information, which helps build trust, improve access to credit, and strengthen financial inclusion in India.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content.
Sachin Seth, Regional Managing Director, CRIF India & South Asia
