Thanks to a concerted effort across the Finance Ministry, RBI, and banks, all major PSU and private sector banks are now on the account aggregator network as FIPs. By some estimates, that opens up over a billion bank accounts that customers can link and share data from for their own benefit. As new data sources such as GSTN, SEBI- and IRDAI – regulated entities join the network, the scale and scope of data available on the network will be truly staggering.
Are service providers ready to compete in this new world? Here are a few points worth considering.
Financial inclusion will accelerate and expand in scope
For decades, financial inclusion meant opening bank accounts for the poor and making sure that welfare payments reached them directly. With the JAM trinity having solved this efficiently at scale, these bank accounts are creating digital data – payments, remittances, loan servicing, etc. – for the hitherto excluded. Account Aggregators will make it easier and safer for these customers to share their data for their benefit – for example securing low value, low-tenure, cash-flow based credit using their banking and GSTN data.
Soon, as insurance, securities, and pension sectors join the network, the scope of financial inclusion can increase to understand not just a customer’s immediate needs but also long-term financial health.
Financial institutions can drive scale profitably
AAs provide FIs real time, consented, machine readable data at massive scale and scope. Compared to alternatives such as customers uploading PDF statements or handing over copies of their financial statements to agents, AAs can dramatically reduce the cost and friction in acquiring data and open up hitherto unviable market segments that require very low-cost structures to serve.
Competition will intensify – and specialize
Armed with consented, authentic, and machine-readable data, FIUs will compete on delivering great customer experiences throughout the customer lifecycle – onboarding, profiling, product / service delivery and so on. The granularity of data that AA fetches will allow specialists to focus on specific areas – for example cash flow lending or consumer durable financing. You can now customize your offer for a target market of 1.
How can Anumati help?
Our DNA, being spun off from Perfios Software solutions – the market leader in automated credit decisioning for banks and NBFCs – makes us think differently. We don’t talk tech or APIs. We understand a lender’s business deeply and invest our energies in helping them develop delightful experiences for their customers. Raw data is incidental. We invest in outcomes that matter to you and your customers.
For more information, drop us an email at info@perfios-aa.com
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