The AA framework will do for personal finance what UPI did for payments.
The RBI recently introduced the Account Aggregator framework to facilitate the sharing of consumer financial data in a consent-based manner, across financial institutions.
There are four major entities in the framework - the Account Aggregator (AA), the Financial Information Providers (FIPs), the Financial Information Users (FIUs), and the consumer.
Account Aggregators are entities that 'aggregate' (shocker) your personal financial data from all your accounts at various financial institutions (FIPs), and then let you access and share parts or all of that data with other financial institutions in the network that need it (FIUs), using a consent-based mechanism.
Imagine you just downloaded a new personal finance app (an FIU) and need to link all your bank accounts (FIPs) to help categorize your income and expenses. Presently, you'd either have to manually enter your various income streams and expenses, or upload a bunch of PDFs from each account for the app to analyze. With the AA framework, you'd just have to click yes on a single consent screen to give the app temporary access to all your transactions instead. The app could then seamlessly analyze them and provide you with a plan for the future. No headache.
If done right, this framework could revolutionize lending, wealth management, and personal finance like UPI revolutionized payments.
Imagine never having to fill another KYC form. Or being able to skip another dreadful onboarding journey by just selecting 'yes' on a single consent screen. You could give a financial service provider immediate but temporary access to all the information required to create your perfect profile and offer you exactly the right:
1. Investment portfolio
2. Health insurance
3. Life insurance
4. Emergency Fund
5. Loans
6. & more
A single click to personal financial freedom is not too far away.
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