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Account aggregator ecosystem: A step towards revolutionising digital lending in India
Journal of Digital Banking,
8
(1),
77-89
(2023)
Abstract
An essential contributor to a nation’s economic success is providing individuals with access to established financial systems. India, through innovative use of digital finance infrastructure, aka India Stack, provided as a public good, removes obstacles in offering financial products to the unbanked and underbanked. The three pillars of the India Stack are: the identity rail (Aadhaar), the payment rail (universal payment interface) and the data-sharing rail of account aggregators (AAs). The next phase in the India Stack is the Open Credit Enablement Network (OCEN), which promises to transform the digital lending industry by shifting the business model from asset-based to cash-flow-based lending. OCEN is a standard set of application programming interfaces (APIs) that pull data based on customer consent from financial information providers and offers it to financial information users to decide on credit requests. AA manages consent on behalf of the customer using data empowerment and protection architecture (DEPA). The rest of the paper explains the interoperability and portability features of the AA ecosystem, the pricing model that the AA can adopt for a sustainable business model, describes the current state of the AA ecosystem in terms of consents provided and fulfilled and concludes with the use cases of OCEN in credit extension and continuous loan monitoring.
Keywords: account aggregator (AA); India Stack; Open Credit Enablement Network (OCEN); open banking; digital lending; data empowerment and protection architecture (DEPA)
The full article is available to subscribers to the journal.
Author's Biography
Venkat Yellapantula is Associate Director at FIS Global, with experience in designing digital lending journeys for its client. He is currently a business solutions architect, architecting the FIS Nextgen Core Lending servicing solution. He is also collaborating with FIS Fintech Partners to provide a digital lending solution in a box.
Venu Madhav Miriyala Venu Madhav is Senior Vice President at FIS Global, with considerable experience in designing and developing component-based core banking solutions from the ground up. In his nearly three decades of experience, he has built high-performance, globally collaborative, multi-locational and multicultural teams. Currently, he is involved in defining, designing, developing and rolling out industry-leading and highly recognised FIS Nextgen Core Banking (FIS Modern Banking Platform). He has patented the idea of ‘systems and methods for rapid booting and deploying an enterprise system in a cloud environment’.
