What is an Account Aggregator? Benefits, Registration Process, and Use-cases in Life Insurance

What is an Account Aggregator?

An Account Aggregator is a RBI-regulated entity that provides a specialized service involving the retrieval and aggregation of financial data from various Financial Information Providers (FIPs), relating to a specific customer. This data is subsequently structured, organized, and presented to the customer or other authorized entities, such as Financial Information Users (FIUs), exclusively based on the explicit consent granted by the customer.

The main goal of the Account Aggregator system is to empower individuals with control over their data, enabling them to share it in a secure, consent-driven, and standardised way.

Key Participants in the AA Ecosystem

Here’s a simplified view of how the AA ecosystem functions:

• Account Aggregator (AA) : Acts as a data-sharing intermediary.
• FIP (Financial Information Provider) : Institutions like banks or non-banking financial company, asset management company etc. that hold your data.
• FIU (Financial Information User) : Entities like insurers or lenders that require your data to offer you a product or service.
• Customer : You, who gives consent to share your data via AA.

Benefits of Using an Account Aggregator

The Account Aggregator system is designed with the individual at the centre. Here are some key benefits:

1. Data Empowerment

   
   

   With an AA, you know what data you are sharing, with whom and for how long. This empowers you to take charge of your financial information.

   
   

2. Secure and Consent-Based

   
   

   Data sharing happens only when you provide clear and specific consent. Your data is encrypted and not stored by the AA.

   
   

3. Faster Financial Access

   
   

   Whether you are applying for a loan, buying life insurance, or seeking investment advice, sharing verified financial data digitally reduces paperwork and speeds up the decision-making process.

   
   

4. Paperless and Instant

   
   

   The entire process is digital, eliminating the need for physical documents. It saves time and ensures accuracy.

   
   

How to Register with an Account Aggregator

Registering with an Account Aggregator is simple and user-friendly. There are multiple ways in which you can register yourself, example: directly through an account aggregator website / application, OR through your product / service provider such as an insurer / NBFC etc.

Given below is an example of how you can register directly through an account aggregator website / application:

Step 1: Choose a Registered AA

Visit the website or download the app of an RBI-licensed Account Aggregator such as CAMS Finserv, PhonePe AA, or Finvu. The full list is available on the RBI website.

Step 2: Create an AA Account

Sign up by entering your mobile number linked to your bank accounts. You will receive an OTP for verification.

Step 3: Link Your Financial Accounts

You can select which bank accounts or financial services you want to link to the AA platform. This linking happens through consent and may require authentication.

Step 4: Share Consent

Whenever you apply for a financial product (e.g., a loan or life insurance policy), you can give consent via your AA to share specific financial data with that institution.

Step 5: Revoke Consent Anytime

You can revoke or modify your data-sharing permissions anytime through the AA interface.

Note: The actual steps may vary depending on the platform.

Use Case Example: Buying a Life Insurance Policy

Let’s say you want to purchase a term life insurance plan with a ₹1 crore cover. Traditionally, you might need to provide income proof, past tax returns, and more. Through the AA system, you can:

• Share your bank account statement(s) instantly with the insurer.
• Helps in underwriting and processing insurance policies more efficiently.
• Receive a personalised premium quote that are tailored to the customer's specific financial situation and needs.
• Complete your purchase within minutes—paperless and hassle-free.

This ensures faster access to financial protection for you and your family.

Is It Safe to Use an Account Aggregator?

Yes. Account Aggregators are licensed and regulated by the RBI, and all data sharing is done through secure APIs with end-to-end encryption. Moreover:

• Your data is never stored by the AA.
• You have complete control and visibility over what is shared.
• You can revoke access at any time.

Conclusion

The Account Aggregator framework is a significant step forward in India’s journey towards a digitally empowered financial ecosystem. It puts you, the individual, in control of your data and helps you access life insurance and other financial services more efficiently.

Whether you are planning for your family's financial security or building long-term savings, Account Aggregators can make the process smoother, faster, and more secure.

Frequently Asked Questions (FAQs)

1. Is registering with an Account Aggregator mandatory to buy life insurance?

   
   

   No, it is optional. However, using an AA can simplify the process and reduce documentation.

   
   

2. Does the Account Aggregator store my data?

   
   

   No. It only facilitates data transfer between institutions after you provide consent. It does not store your financial data.

   
   

3. Can I use one AA for all my financial accounts?

   
   

   Yes, if your financial service provider (bank / NBFC / insurer etc.) is associated with the selected AA, you get the flexibility to use same AA for all your financial accounts.

   
   

4. What if I change my mind after sharing consent?

   
   

   You can revoke or modify your consent anytime using the AA platform.

   
   

5. Is there a cost to using an Account Aggregator?

   
   

   Cost of using an AA would depend upon the policies of your service provider. It is advisable to check with your service provider.