Financial data breaches are one of the major problems faced by top countries worldwide, and India is no exception. The widespread penetration of the internet in the country indeed facilitated the infrastructure to make online payments swiftly. But it also brought the monster of data theft with it. Though millions of Indians are opting for online payment methods like UPI, networking and others, a majority of masses are concerned about the disclosure of their sensitive financial information. Numerous studies have also found possible threats that can attack people’s financial data. According to a 2021 Consumer Security Mindset Report. by popular internet security organization McAfee Corp, 78% of the Indian participants in the study admitted to being concerned about the theft or illegal disclosure or sale of their sensitive financial data such as bank account numbers, credit and debit card details and other financial data.
To solve this massive problem of financial data theft, technology was introduced, and it’s called account aggregation. Aggregating the account means securing and governing the access of the user’s financial data through an aggregation platform that ensures legitimate and secure access to the entities that have the authority to access that data through the user’s consent. Account aggregation platforms like Anumati offer a one-stop solution to store your financial data and secure access to users’ financial information between the Financial Information User (FIU) and the Financial Information Provider (FIP). To help you understand how AAs work, here are five incredible benefits of account aggregators. Take a look.
1. Dedicated Secure Dashboard
One of the major problems many people and small business owners face is the difficulty of raising credit from banks due to insufficient or missing documents. Financial documents are often scattered across various online and offline platforms, and it can be challenging to manage them in one place. Due to the confidential and sensitive nature of financial documents, it becomes crucial to access and use them carefully. Thankfully this major problem is solved by account aggregators(AA) like Anumati. The AA offers a dedicated, user-friendly, secure platform to aggregate a unified view of all bank accounts in one place. The user can access the information from these accounts with just a tap on the screen. On top of that, the users won’t have to run around to gather their financial documents while applying for loans and other financial products. They can access all the essential financial information from the apps of AA.
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2. No need for physical paperwork or KYC
Know Your Customer or KYC is one of the crucial aspects of securing any financial benefit or loan. Banks use KYC to determine and validate the borrower’s identity and other personal information. If the borrower’s financial institute, i.e. is registered with the AA platform, the borrower doesn’t have to go through the manual KYC process. When the AA receives consent from the user, it pulls all the required financial data. It provides it to the lender or financial institutions where the borrower is planning to get a loan or other financial product like insurance. The convenience of not having to look for physical NOCs or bank documents frees users from the hassle of providing their information documents and substantially reduces the loan processing time.
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3. Secure handling of data
Data protection is one of the major concerns faced by economies that are rapidly growing in terms of technological infrastructure. There are multiple past instances where the financial data of millions of users were exposed to the outer world. To avoid such cases, The Reserve Bank of India has set strict data privacy and sharing guidelines for AA platforms. According to these guidelines, the data shared through the account aggregator mechanism must be encrypted and have secure digital signatures. The data must be fully encrypted during the transactions between the originating bank and the financial institution from which the user is seeking financial products. The AA is data blind and cannot read the encrypted form—that way, only the Financial Information User who has asked for the data.
4. Reduced Processing time
One of the primary reasons various financial transactions take time is the prolonged processing time. The multiple stakeholders in financial transactions need to perform the crucial task of determining and validating the identity and eligibility of the borrowers to decide whether or not they are eligible for the loans or any other financial products. Financial processes like manual data collection, background checks, data gathering and updating of the system take a lot of processing time. The AA platform replaces these processes through digital data processing. All the information is encrypted and carries the digital signature of the user. That means the concerned parties know that the user has consented to view and use their financial data. This substantially reduces the manual processing time. On top of that, it improves the collaboration between the entities and reduces confusion among the customers and financial institutes.
5. Ease of access
One of the significant benefits of AA platforms is the ease of data access they offer. The platforms are majorly available on mobile applications and are cloud-based. That means the user can access the information through the app anywhere and anytime. It wouldn’t have been possible a few years back when all the transactions used to be offline where the user had to rush to submit the documents to the financial institute. The AA platforms avoid the need for manual data access by avoiding a digital, cloud-based platform to access information and provide consent from any part of the world.
Account aggregators are undoubtedly the game changer in the money lending space. It is one of the foundational steps toward achieving a robust and secure lending system. By leveraging technology and the internet, financial institutes like banks, insurance companies and other financial institutes have transformed into strong digital lending powerhouses. The AA platforms have changed the game and helped towards a strong economic hub that facilitates highly secure financial transactions and processes.