Fintech News & Insights

For Week Ending 2nd June

What’s Inside –

1. Account Aggregator Overview

2. Account Aggregator Case Study
3. Weekly Market Updates & Funding
4. Resource Centre
1. Knowledge Centre
Industry Challenges before Account Aggregators

Individual or Enterprise's data spread across silos with:

• Banks No Mechanism to access User's data digitally even after User's
• Telecom Consent
• Health Care Institution

An individual or entity had to Collect, Collate & Share Absence of Aggregated Data doesn't provide full view
Data Physically or Electronically

Absence of Singular Framework to Aggregate data &

Friction in Accessing & Leveraging Data
Share
Knowledge Centre

Why do we need Account Aggregators

• Financial data is fragmented across various sources, creating challenges in data
collection and consumption.
• Account aggregators offer a centralized platform to collect and aggregate data from
multiple sources.
• They act as intermediaries, simplifying the process for individuals and institutions by
eliminating the need to navigate through different interfaces and log in separately to
each financial institution.
• Account aggregators can aggregate data not only from financial sources but also from
other domains like utility providers, telecommunications companies, and loyalty
programs.
• They enable secure sharing of data with authorized third-party applications and
services.
• Users have the ability to grant access to specific data sets, enhancing the functionality
of various applications such as personal finance management tools, budgeting apps, and
analytics platforms.

Multiple sources for Before AAs arrival it was a Role of AA is not The friction can result in
Data Collection & Time-consuming process limited to financial data leakage compromising
Consumption in acquiring information data alone data privacy

• Prior to account aggregators (AAs), industry relied on manual methods to gather

information from various sources.
• Manual methods involved visiting multiple websites, logging into different
accounts, and navigating through separate interfaces for each financial institution.
• Each institution had its own unique login credentials and data retrieval processes,
adding complexity to the task.
• Account aggregators reduced the time and effort required by creating centralized
platforms and establishing connections across multiple financial institutions.
•Manual data collection methods require individuals or institutions to provide sensitive
information separately to each platform.
•This increases the risk of errors, such as sharing sensitive information with the wrong
party or falling victim to phishing attacks.
•Lack of standardized framework makes it difficult to ensure consistent and robust
data protection.
•Account aggregators (AAs) address these challenges by offering a secure framework
and handling the data retrieval process on behalf of the users.
Knowledge Centre

Account Aggregators Overview

An Account Aggregator (AA) is a type of RBI regulated entity with an NBFC-AA license that helps an individual to digitally access
and share information from one financial institution they have an account with to any other regulated financial institution in the
AA network.

Key Points

AA acts as an intermediary between FIU & FIP Give or Revoke access to your active consents anytime

AA cannot share any data without the consent of

AA doesn't Store or Process Individual's Data
the individual

AA is Data Blind - Individual's Financial Data is

AA can charge a fee for their services
encrypted with AA

AAs cannot undertake any other business

Knowledge Centre

Account Aggregators Overview

Currently, 7 Account aggregators are live in the ecosystem, and 8 have got in-principle approval to go Account Aggregators
live soon Live

Source:
Sahamati
Knowledge Centre

Consent Architecture
Consent Framework –
Consent is a digitally signed artefact collected by AA for processing request to an FIP
for providing financial information for consumption by an FIU. A consent is always
Purpose Code -
recorded for a purpose
• Purpose codes are used to categorize and specify the intended purpose of data access
requested by third-party applications or services through an account aggregator.
• The purpose code serves as a mechanism to ensure that access to financial data is granted
only for legitimate and authorized purposes. It helps establish transparency and clarity
between the user, the account aggregator, and the third-party application or service that is
seeking access to the user's financial information.

Category Purpose
Category Name Description
Code Code

01 Personal Finance Wealth Management Service 101

Customer spending patterns, budget or

01 Personal Finance 102
other reporting

02 Financial Reporting Aggregated statement 103

Account Query and Explicit consent for monitoring of the

03 104
Monitoring account

Account Query and

03 Explicit one-time consent for the accounts 105
Monitoring
Knowledge Centre

Consent Attributes

Validity - Provide timeframe for which the consent is valid. Users Data Consumer - Ensures that data access is granted to trusted and
can choose if it must be one-time consent or for a defined period. authorized entities.

Type of Fetch (One Time/Periodic) - Specifies whether the third-party

Mode - Method or channel through which the consent is granted. application or service can retrieve the data only once or if it has ongoing
It defines whether the consent is given through physical document access at regular intervals. This attribute provides flexibility in defining
or other means. the frequency of data retrieval.

Details of Data - Provide specific information about the types of financial

Purpose - Outlines the specific purpose or use case for which the
data that the user has consented to share. It can include details such as
data access is authorized. It provides information about the
account balances, transaction history, investment portfolio details, credit
intended use of the financial data by the third-party application or
card statements, loan information, and any other relevant data elements.
service

Data Retention by Consumer - Specifies the duration for which the

third-party application or service is allowed to retain the user's financial
Data Owner - Establishes accountability & ownership of the
data. It ensures that data is not retained longer than necessary and helps
shared financial data of an individual or entity
protect user privacy and data security.
Knowledge Centre

Account Aggregators Data Points

Wealth Management Funds /

Lenders Micro Finance
PFM

BANK NBFC Wealth Firms Insurance

Deposits Life Insurance

Stocks
Savings Health Insurance
Term Deposits Mutual Funds
FD/RD Micro-insurance
PMS
Existing Bank Term Life/Endowment
NPS
Loans

Loan Portfolio Takeover Credit Scoring 360 Degree Tax Planning Customer Identification
Use Cases

Customized Offerings Early Warning System Cash Flow Analysis Customer Upgradation

Cashflow Analysis Credit Monitoring Risk Tolerance & Appetite Group Offferings
Knowledge Centre

Account Aggregator App

Shows the user all the Consents given, Revoked consents and a log of all Data Requests.

Specific to Aggregator -
The AA app is designed by
and specific to a
particular account
aggregator

Data Aggregation -
Consent Management
The App aggregates data
- Users can Review &
from multiple resources &
Modify their consents
presents it in a unified &
and Revoke it from the
user-friendly interface
App

App Integration -
Real Time Updates - AA apps may allow
Provides real-time integration with third-party
updates and notifications application or services
about account activities.

Financial Insights &

Analytics -
Provides insights on
aggregated data like saving
opportunities etc.
Knowledge Centre

Account Aggregator Ecosystem - TSP Route

TSPs enable FIUs to integrate with the ecosystem by providing FIU-side modules to link with AA. At backend TSPs are integrated with
all account aggregators in the ecosystem and enable complete coverage of the ecosystem ( with pre-decided commercials)

Standalone TSPs in addition to AA offered TSPs were considered for partnerships

TSP offer value-added service by providing:

• AA data standards TSPs
• Data Analytics AA offered TSPs

MoneyOne FinPro/Finshare

Finbit .io

Standalone TSP
Knowledge Centre

AA - Technology Service Providers (TSPs)

They can help fintech products in framing

TSPs are a part of Account
use cases - underwriting models, SME
Aggregator Ecosystem
Scorecards, Early Warning monitors
among others

TSPs can be broadly of three types –

They collaborate with FIUs and • AA Data Standard TSPs,
FIPs to deliver AA products and • Data Analytics TSPs and
services • User Experience TSPs
Knowledge Centre

Current Ecosystem - FIP & FIU

FIPs: Financial Information Provider.
A Financial Information Provider is an entity that holds and maintains the financial data of individuals or businesses. These can include banks, insurance companies,
mutual funds, credit card companies, and other financial institutions. FIPs are responsible for securely storing and providing access to the financial data of their
customers.
FIUs: Financial Information User.
A Financial Information User is an entity or application that utilizes the financial data obtained through account aggregators to offer various services to the users. FIUs can include
financial planning apps, personal finance management tools, investment platforms, loan providers, and other applications or services that require access to a user's financial information
to provide value-added services.

FIPs: Currently, 26 entities are Live, which include PSU banks (only live with NADL AA) , Private Banks , Private Insurance and Small Finance Bank

FIUs: Currently, 97 entities live in the ecosystem on the FIU side, which majorly includes Banks and NBFCs

Participant’s regulatory requirement: Network participants should be a regulated entity under RBI, SEBI, IRDA, PFRDA to participate in the ecosystem data sharing
Knowledge Centre

API Standards
• Set up by the Reserve Bank of India to serve its IT and cybersecurity needs and to improve the cyber resilience of the Indian
banking industry.
• It assists in IT systems audit and assessment of the RBI-regulated entities; advises, implement and manages internal or
system-wide IT projects (both the existing & the new) of the Reserve

• It owns the technology

standard for real-time
financial information
aggregation
• REBIT has published the
guidelines for setting up
NBFC Account
Aggregators
Knowledge Centre

Account Aggregator Ecosystem

2. Case Study
Assisting Leading Tech Start-up to get AA License
Technology and Platform Assessment

Objective • We have evaluated the Technology strategy, Technology & Platform

Architecture, Functional Requirements, and designs.
Our objective was to assist one of the premier Fintec client in applying for
• Assess customer life cycle processes, Infrastructure requirements, and
an Account Aggregator License by assessing their existing services,
company policies.
technology infrastructure, and documentation. Our aim was to identify
• We have recommended a curated technology stack for a dynamic consent
GAPS in compliance with RBI guidelines and provide recommendations for
mechanism.
improvement, ultimately helping the client obtain the In-Principle license.

The Digital Fifth Approach Solution Delivery

• We have provided a comprehensive GAP report on technology architecture,

Regulatory and Compliance Assessment
functional architecture, organization structure, policies, procedures, and
• Review RBI's NBFC AA Guidelines and conduct workshops to educate processes.
internal stakeholders on information security and cybersecurity. • Offered a detailed mitigation plan for addressing identified gaps and areas
• Document existing practices, procedures, and processes, and advise for improvement.
on best practices. • Assisted in responding to RBI's queries during the licensing process.
• Assess Account Aggregator API flows and suggest ideal
implementation flow
• Provide inputs for a policy framework and information security
procedures in line with RBI's guidelines.
Case Study

Assisting Leading Tech Start-up to get AA License

Solution Outcomes Accomplishment

• Comparative analysis of technology architecture, business processes,
functional architecture, organization structure, policies, procedures, and
processes.
• Identification of gaps and areas for improvement, accompanied by a
detailed mitigation plan.
• Recommendations for changes in policies and processes to align with
regulatory expectations.
The client successfully obtained the In-Principle license for Account
Aggregator Services.
We could help the client achieve their objective of obtaining the In-
Principle license for Account Aggregator Services. Our assessments,
recommendations, and support helped them ensure compliance with RBI's
guidelines, enhance their technology infrastructure, and create robust
documentation for their platform.
3. Market Updates
JCB partners with NPCI to offer 40% cashback for RuPay JCB Cardholders

Ø All RuPay JCB Debit & Credit Cardholders will be offered 40% cashback on in-store purchases in the UAE,
Thailand, Malaysia and Spain
Ø The maximum cashback amount per transaction is INR 3,000, with an overall cap of INR 15,000 per card during
the offer period.
Ø It is the 3rd cashback campaign launch in UAE, Thailand, Malaysia & Spain, and due to summer season JCB
expects high flow of tourists which would also result increase in the transaction flow.
Ø NPCI is focused towards making Rupay Global & already successfully managed the last 2 editions of cashback
rewards.
Market Updates

Paytm partners with SBI Card and NPCI to launch next-gen co-branded RuPay credit
cards

Ø Three homegrown brands join forces to drive credit inclusion by providing Welcome Benefits, Spend-based
cashback points, & Milestone Benefits.
Ø This will provide convenience by enabling customers to use the Paytm SBI Card on RuPay network, where UPI
payments through credit cards will be live shortly.
Ø This will result in expansion in access to credit and foster financial inclusion by bringing ‘new to credit’ users into
the formal economy
Ø Customers can enjoy exclusive privileges worth up to ₹75,000 with a complimentary Paytm First Membership that
also includes OTT platform membership, flight tickets discounts through Paytm app.
Ø Cardholders receive cashback of 3% on Paytm SBI Card on booking movie and travel tickets on the Paytm app, 2%
cashback on all other purchases on Paytm App, and 1% cashback on spends elsewhere.
Market Updates

Paytm Launches UPI SDK on its Paytm Payments Bank Tech Stack

Ø Paytm has introduced a UPI SDK that enables customers to conveniently make UPI payments directly within the
app of online merchants, eliminating the need to redirect them to the Paytm app.
Ø Users can now pay directly within the Merchant App by entering their UPI PIN, without having to switch to another
application.
Ø This feature will be built on the Technology stack of Paytm Payments Bank.
Ø This initiative is expected to assist Paytm in maintaining its third-party payment ecosystem and stopping
customers from transitioning to the UPI interface of online merchants like Zomato, who are developing their own
payment systems.
Ø Paytm anticipates that this new offering will reduce the number of steps required by customers during the
checkout process by 5X, resulting in a faster and more efficient experience.
Market Updates

Paytm Money adds Bonds Platform to its Investment Offerings

Ø Paytm Money has launched Bonds Platform to help retail investors enter into the Debt Market
Ø Paytm aims to simplify the bonds investments for the investors. The company will allow investments in 3 types of
bonds – Government, Corporate & Tax-Free.
Ø Company will aim to provide all the required information & analytics at one place to educate investor in analysis &
returns they can expect.
Ø The new platform is currently launched with an Early Access waitlist programme
Ø Paytm believes the country can have 100 Mn investors and they all can start their journey through investing in
Bonds
Market Updates

Razorpay launches ”Turbo UPI”

Ø Razorpay has launched a new product called Turbo UPI in partnership with NPCI & Axis Bank
Ø Aim of Turbo UPI is to make UPI payments fast and reduce payment failures.
Ø Merchants can integrate it in their payment gateways
Ø Turbo UPI claims to increase 10% in UPI transaction success rates as third party UPI apps like Paytm involve
additional steps which makes the process inconvenient.
Ø Other players in the market who have adopted the similar process are Amazon with its Amazon Pay UPI, Zomato
with Zomato UPI and Flipkart is coming up with its UPI.
Weekly Funding

Company Round Amount (USD) Overview

Provider of insurance brokerage services for

Seed 386 K business sectors
Founded: 2022

SaaS-based accounting and finance management

Seed 1.5 M platform
Founded: 2022

Online platform for web3 analysis tools

Seed 4M Founded: 2022

Digital Wallet & Online Payment App that allows you

Equity
100 M to make instant Money Transfers
Investment Founded: 2015

Seed 10.2 M Payment's infrastructure for cross-border payments

Founded: 2021
4. Resource Centre
Bharat Fintech Summit 2023
The Account Aggregator is poised to revolutionize the Financial Industry. Don't miss the panel discussion on "AA Adoption in
India: Shaping the Next Phase of Open Banking for Bharat" at the Bharat Fintech Summit. Gain exclusive insights from industry
leaders.

Mr. Srikanth shares his perspective on:

• The definition of Account Aggregator and its adoption in India since its inception.
• The impact of Account Aggregators on serviceability, highlighting Axis Bank's 30% increase in conversions with the same
service effort.
• Drawing parallels between AA and UPI, as our leaders believe AA has the potential to reach the level of success that UPI has
achieved.

Mr. BG Mahesh focuses on:

• Understanding the core strength of AA and UPI, which lies in interoperability.
• Exploring how the AA ecosystem can assist Financial Information Users (FIUs) and Financial Information Providers (FIPs).

Mr. Sony emphasizes the importance of Data Security Measures: Click here to watch the Video
• Addressing the management of data security.
• Discussing the impact of the Privacy Bill on the AA ecosystem, examining its pros and cons.
• Reminding everyone to be mindful of offline data points, as the focus is primarily on digitalization.

Mr. Manoj Alandkar delves into the technical aspects of AA:

• Explaining how AA operates in the backend, facilitating communication between FIPs and FIUs.
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