Punjab National Banking (PNB) has joined the account aggregator (AA) ecosystem, as well as gone live on the ecosystem in two formats – Financial Information User (FIU) and Financial Information Provider (FIP).
Other banks, such as the State Bank of India, Canara Bank and Indian Bank have already started the implementation, but PNB is the second public sector bank to go live in both formats.
A total of 54 FIUs and FIPs are live on the AA platform.
Launched in September 2021, the AA ecosystem has witnessed participation from several private and public sector banks. Even the Securities and Exchange Board of India (Sebi) is looking to make an entry into the ecosystem soon.
WHAT IS THE AA SYSTEM?
In recent years, particularly after the covid-19 pandemic, most services have become digital. Hence, there is a need to upload financial data and relevant paperwork online, in one place. To achieve this, the Reserve Bank of India (RBI) announced the AA framework.
The AA framework enables quick and real-time sharing of financial information, in a data-blinded manner. So, a user need not worry about privacy issues, while data is circulated between regulated entities.
For users, this framework can help in managing wealth, applying for loans, monitoring expenditure, maintaining health records, as well as buying insurance.
PNB is live on the ecosystem in both FIP and FIU formats. This enables the FIU to ask for information from FIU, based on consent provided by the user through their AA account.
“AAs enable seamless encrypted data transfer between financial information providers
(FIPs) and financial information users (FIUs) without storing, processing or selling the data, thus eliminating any conflict of interest,” says Nikhil Kurhe, CEO, Finarkein Analytics, a data analytics company.
Ultimately, the ecosystem will streamline the process of data transfer for both users and service providers. Moreover, the need for physical documentation is entirely eliminated in the AA ecosystem.
Atul Kumar Goel, MD and CEO, PNB says: “Punjab National Bank is working on multiple business use cases which can leverage on the AA ecosystem and offer interesting products to its customers. This will further enhance the outreach of the bank to provide customised digital products to its customers.”
Only recently, PNB also launched the pre-approved personal loan facility in 4 Clicks and single OTP through its mobile-banking application ‘PNB One’. It has also become the first public sector bank to provide a loan repayment facility through the Bharat Bill Payment System (BBPS).
