The Road Ahead
In the testing phase, banks have started with a small set of services that can be accessed if customers have their data available through an account aggregator. Some of these lenders have starting offering personal loans and small business loans on the platform.
The financial services providers can come up with multiple use cases over time. This could include broader loan categories, opening bank accounts, investment products such as mutual fund schemes and even insurance plans.
For consumers, the account aggregators can help make a number of financial transactions paperless and reduce the turnaround time. A simple authorisation to the account aggregator to share information from, say, your bank accounts with an asset management company, can help complete a transaction such as a mutual fund investment. Similarly, you may be able to process a loan within minutes if you authorise your account aggregator to share information, such as your bank account statements, with the entity you are seeking a loan from.
The information shared is in fully machine-readable format, which their (service provider's) underwriting models can use. So lets say a customer is seeking a loan, the lender can issue the approval within a couple of minutes, as they are able to access a customer's bank account details with their consent.
This capability will take time to evolve, however, and there has to be buy in from a larger number of financial institutions and customers to be on-boarded.