PB Fintech, which is the parent company of Policybazaar and Paisabazaar platform, is now eyeing the account aggregator business. And this news catch eyeball of the player in the ecosystem.
What Are Account Aggregators?
To know about the below mentioned points you can check the blog
How AA works?
Aspects of AA Ecosystem
Use cases of AA Ecosystem
In this blog will focus on How it can help the Consumers & Financial Services players in the ecosystem.
New to credit (NTC)
If you don’t have a credit score it become challenging to get a loan from bank. Utilizing alternative data is considered one of the best approaches to be adopted by financial institutions and banks to make data-backed informed lending decisions and get a complete understanding of their customer’s ability and willingness to uphold credit commitments.
The use of AA technology allows collecting alternate data for CFA (Cash Flow Analysis) of first-time borrowers to build a credit profile that can be used for underwriting.
Democratizing credit
Account aggregators would disrupt the borrowing system from institutionalized financial institutions that make money on having custody of the borrower’s financial data. Selling financial information would be disrupted, just as UPI disrupted the e-wallet business.
Tracking and Monitoring of Investments
Most investors suffer from an inability to visualize all their investments under one platform. Manual updating of transactions and holdings leads to a higher chance of investors entering incorrect information.
The AA ecosystem eases all these concerns by allowing insights from investors’ financial information with their explicit consent. Also, NSDL e-Governance gets RBI's in-principle approval as Account Aggregator.
MSME lending
The RBI MSME Committee report estimated that credit demand to the tune of Rs 25 lakh crore was going untapped in the MSME sector. Currently, they rely on a mix of paperwork and intuition to do underwriting for issuing loans. That to for higher ticket size they require ‘collateral security’ which many a time MSME borrowers are unable to offer.
With AA MSME can share GST, tax returns and other financial records pertaining to business as & personal assets instantly with FIs to get quick credit acess
Conclusion
Its all about how we harness the AA Ecosystem to create right value and produce the best decision.
Sources: -
https://www.bloombergquint.com/business/bq-explains-what-are-account-aggregators-and-how-they-help
https://www.cnbctv18.com/finance/how-fintechs-have-transformed-banking-for-individuals-and-businesses-11874782.htm
https://www.outlookindia.com/website/story/business-news-how-first-time-borrowers-with-no-credit-score-can-get-a-loan/405129
https://economictimes.indiatimes.com/small-biz/money/how-account-aggregators-can-bring-an-era-of-democratised-credit/articleshow/87577782.cms
https://economictimes.indiatimes.com/news/india/nsdl-e-governance-gets-rbis-in-principle-approval-as-account-aggregator/articleshow/87781541.cms
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