How AA framework is changing your financial life for the better

Banks and insurers have started offering customers instant access to their financial products with AA ecosystem

- Jash Kriplani

 Opening a bank account is usually the first step in your financial journey. And in India, there is no limit on the number of bank accounts that you can have, although financial advisers would have you open no more than three or four of them for ease of managing the accounts. Many people though end up opening separate accounts in multiple banks for various reasons, be it lower interest rate on home loans or for buying other financial products. A change in jobs, for instance, also leads to a new bank account as organizations usually tie up with a particular bank for salary accounts. But multiple bank accounts can only lead to a fragmented view of your savings. That's where the Account Aggregator (AA) framework will help you keep an hawk's eye on all your accounts.

Three years since the Reserve Bank of India (RBI) launched the AA framework-a financial data-sharing system aggregating a customer's financial information in one place, more banks are offering this facility to customers.

It is not only helping individuals to view all their savings in one place and track their spending habits, but it is also enabling banks to sanction loans to customers who are yet to build their credit history. Experts say the AA framework will help banks to sell non-loan products to individuals such as insurance and mutual funds.

Credit cards, loans Banking executives say giving credit cards or small-ticket loans has become a lot more seamless after the adoption of AA framework.

"We can easily issue credit cards or loans to any non-Axis Bank customer.

The customer can digitally share his or her bank statement through the account aggregator ecosystem. And we will underwrite it in real-time. The loan disbursal can happen as soon as the customer does his video KYC (know your customer, a verification process) with us," says Sameer Shetty, president and head-digital business and transformation, Axis Bank.