This is where the Account Aggregator framework steps in to make sharing of such financial information easier, quicker and safer in just a few simple steps. So, what is an Account Aggregator? Under the aegis of RBI, Account Aggregators are redefining how financial data is shared across organizations, simplifying processes and making the overall experience smoother and hassle-free for several policyholders. Account Aggregator is one of the many significant ways in which digital transformation in the insurance sector is happening.
From buying insurance policies, to applying for claim settlement and tracking benefits under the plan, Account Aggregators are indeed game changers in their own right, making the insurance journey transparent for all.
How does an Account Aggregator work?
Different financial institutions require your data from time to time to serve you better. However, the migration of financial databases between these institutions is not always straightforward, leading to procedural bottlenecks for the policyholder. Think of the Account Aggregator as a bridge to solve this problem of data sharing so that your financial data sources (banks, tax records, mutual funds etc.) can move what's required in a jiffy to the respective financial institutions in need of such data. In other words, an Account Aggregator is a secure digital platform that helps you share your financial information from one institution (say your bank) to another (like an insurer or lender), but only with your explicit consent.
What is the meaning of Account Aggregator and how does it work exactly? Account Aggregator is a licensed non-banking financial entity regulated by the Reserve Bank Of India (RBI). Let’s understand this further with an example. Suppose you are buying a life insurance plan from Ageas Federal. Instead of uploading all your documents manually like your salary slips, bank statements, and investment proofs, you can give direct permission to the insurance company through an Account Aggregator to access this data digitally. And the best part? This makes the process faster, secure, instant, paperless and free from any manual mistakes.
| Steps | Previous Process Before Account Aggregator (AA) | Current Process With Account Aggregator (AA) |
|---|---|---|
| Document Collection | Manual uploads of income proof, bank statements | One-click consent via AA |
| KYC Verification | 2–3 business days | Instant digital verification |
| Policy Issuance | Delays due to document checks | Instant issuance possible |
| Claim Settlement | Manual data submission | Quick verification through linked data |
| Data Security | Multiple touchpoints, prone to leakage | Encrypted, consent-based sharing |
| Paperwork | Physical forms and photocopies required | 100% paperless digital process |
| Operational Costs | High backend and documentation costs | Reduced costs via automation |
| Customer Experience | Lengthy, fragmented, and confusing | Seamless, unified, and fast |
| Future Readiness | Traditional and siloed | Digital, integrated, and backed by advanced technology |
Benefits of Account Aggregators at a glance
- Empowers policyholders through data ownership
- Ensures consent-based partial and consolidated data sharing
- Simplifies buying, claim settlement, renewal and tracking of insurance policies
- Helps with quicker, digital-first and paperless processes for ease of operations
- Enhances trust, promotes transparency and saves time
- Reduces human errors and procedural delays
- Removes a back-and-forth verification layer from the process
- Supports data verification instantly, thus speeding up policy approval and issuance
- Increases data security with end-to-end data encryption
- Brings down chances of data loss, fraud and misuse
- Allows viewing and accessing of financials under one roof for better and streamlined management
- Encourages policyholders to make wiser choices and financial decisions
- Pushes customers to stay on top of their premium payments and renewals
- Eliminates complicated documentation of your financial information
- Enables a customer-first insurance ecosystem with one-click sharing
- Standardizes retrieval and aggregation of financial data
- Makes regulatory compliance mandatory by aligning with RBI and IRDAI norms
- Secures access by facilitating revoking and modification of consent via the AA app
How to use an Account Aggregator for insurance?
Here’s a quick guide for policyholders to get started with their Account Aggregator onboarding process:
- Download an AA-registered app (like Finvu, OneMoney, CAMSFinServ, etc.).
- Register using your mobile number and verify your identity.
- Link your financial accounts (banks, mutual funds, insurance policies).
- While buying or claiming insurance, give consent for data sharing through the app.
- Revoke consent anytime if you no longer want the insurer to access your data.
In essence, the Account Aggregator system connects four key parties. Firstly, the Financial Information Provider (FIP): The institution that holds your data such as banks, mutual fund companies, or tax platforms. Secondly, the Financial Information User (FIU): The institution requesting your data (For example, an insurance company). Thirdly, the Account Aggregator (AA): The secure intermediary that facilitates the data transfer in a structured manner for your utmost convenience. And lastly, it’s you: The policyholder (customer) who gives the consent for such a transfer to happen between all the related parties.
