The fintech revolution in the country has been in the works for a couple of years now with the coming together of startups, government policies, regulators, and public service motivated groups. Now, this scale is expected to getter bigger with the account aggregator model.
Medici, a global fintech research and innovation platform, in its India Fintech report 2020, highlighted the importance of account aggregator model, which seems to be a natural evolution from the earlier innovations.
India is currently home to around 2,174 fintech startups, says a report by Medici
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The success of Unified Payments Interface (UPI) is well known, and around 20 nations are keen to study and implement this model. But this is just one part of the journey as the goal of financial inclusion and easier access to credit for the larger sections of the country’s population is yet to be achieved.
India is currently home to around 2,174 fintech startups, with a majority of them located in Bengaluru, Mumbai, and the National Capital Region (NCR), according to Medici.
Despite the progress made by these technology innovations, there is much progress to be made to include those vast sections of the population whose per capita income is lower than $1,300 (approximately Rs 97,500).
“Having tasted success on a large scale with UPI, India is now on the cusp of going live with the account aggregation framework, which will be its first foray into consent-based financial data sharing,” says the report.
The account aggregators are trusted intermediaries that are empowered to broker consumers’ financial data between data providers and data users. The key thing about the account aggregation model is that it will help individuals and small businesses use consented data sharing to increase access to cheaper credit. The application of account aggregation spans a broad set of use cases, such as personal finance, wealth advisory, credit decisioning, access to credit, and access to insurance.
The report notes the key role played by India Stack in building technology infrastructure like UPI and DigiLocker, which has created a digital payments ecosystem. The impact of India Stack through its different layers has been huge since its inception.
“It has acted as a disruptive force and reinvented the wheel to build new processes and provide the low-cost digital push India needed to move from a data-poor to a data-rich economy,” it said.
(Edited by Megha Reddy)
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