How Account Aggregators will revolutionize the Lending System in Bharat?



Those who have read our previous article already know that an account aggregator obtains, consolidates, and presents an individual’s financial information in an easy-to-understand manner, allowing the individual's financial holdings to be easily understood and analyzed in a secure consent driven environment. In this blog we pick up a deeper use case of the impact of account aggregators on lending in India.




“Account Aggregators are set to Revolutionize Credit Distribution in India?”





With account aggregators in hand, things will get faster. Five minutes for loans will no longer a marketing jingle, and with account aggregators in India, loans, investments, and new accounts would be processed without any physical documents. The cogwheels will turn in the background with robust security protocols and explicit user consent, so most financial services will be as simple as clicking a few buttons. Might look like a magic to many, but will be a habit once things become mainstream, similar to the UPI.




There are several benefits through which aggregators can change the lending related financial landscape, as they become increasingly common.


  • Financial Information Standardization - As a result of working with account aggregators, financial information will be standardized across all FinTech players. The misalignment in data that is shared is primarily a result of their different formats being stored. Since they store all financial data in a standardized format, they can transfer information more easily, create underwriting algorithms, and monitor data more quickly.

  • Enhanced security and privacy - AAs offer improved data privacy and protection as one of their main value propositions, and any organization that participates in them will need to follow these policies in order to ensure a trustworthy data sharing process. Best practices for security and privacy are encouraged, including encryption at the source, data masking, and explicit user content.

  • Integrating financial players - In the future, banks and lending institutions will increasingly integrate their architecture to ensure their existing systems are compliant with the requirements. For example, lending institutions can incorporate transaction-based lending as this will simplify the process of receiving financial information from customers.

With these advantages in this framework, The Financial Information User (FIU) can now make instant credit decisions and disburse funds right away. FIUs can also enhance their underwriting skills as they will have access to alternative data sources for customers with low credit scores. New opportunities will arise for lenders and borrowers alike as a result of the availability of data.


India's financial ecosystem will undergo a complete transformation once the AA framework is in the proper place. It will do the same thing for the credit sector as what UPI did to the digital payments system. There is excitement in the financial sector about this disruption revolutionizing the lending industry within the next few years. We can proudly say that the Account Aggregators are the future and a clear work in progress in terms of revolutionizing the lending system in Bharat!

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