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Account aggregator ecosystem: A step towards revolutionising digital lending in India

Author

Listed:
  • Yellapantula, Venkat

    (FIS NextGen Lending Core, India)

  • Miriyala, Venu Madhav

    (FIS NextGen Core (Deposits & Lending), India)

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.

Suggested Citation

  • Yellapantula, Venkat & Miriyala, Venu Madhav, 2023. "Account aggregator ecosystem: A step towards revolutionising digital lending in India," Journal of Digital Banking, Henry Stewart Publications, vol. 8(1), pages 77-89, June.
    • Handle: RePEc:aza:jdb000:y:2023:v:8:i:1:p:77-89
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    More about this item

    Keywords

    account aggregator (AA); India Stack; Open Credit Enablement Network (OCEN); open banking; digital lending; data empowerment and protection architecture (DEPA);
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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