✅An Account Aggregator (AA) is a type of RBI regulated entity (with an NBFC-AA license) that helps an individual digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network. Data cannot be shared without the consent of the individual.
MECHANISM OF ACCOUNT AGGREGATOR
✅Financial Information Provider (FIP) are institutions that hold user data like Depositories, Banks, NBFCs. FIPs can share customer’s financial information with Financial Information User (FIU) via requests through an Account Aggregator.
✅ Financial Information Users (FIUs), like banks and NBFCs, can receive digitally signed data from Financial
Information Providers (FIPs) for purposes declared in the data-sharing consent agreement.
✅As per the principle of reciprocity, every entity needs to be a FIP (Financial Information Provider) first and then an FIU (Financial Information User) to ensure the sustainability of the ecosystem.
✅Account Aggregators cannot see the data but only can take it from one financial institution to another based on an individual’s consent. The data AAs share is end to end encrypted through ‘digital signature’. Contrary to the name, they cannot ‘aggregate’ the customers data.