22 Apr 2022 By PAYCEC
Open Banking is a system in which data is freely shared with the consent of the customer in order to develop the necessary analytics and deliver financial and other services.
Because permission is a key component of the Open Banking concept, it is widely assumed that Open Banking enhances customers' control over the data they generate.
The Reserve Bank of India built Account Aggregators in 2016 as part of a Master Direction to assist the Open Banking system.
Previously, data was shared directly between information providers and users (for the sake of simplicity, termed as FIPs and FIUs, respectively), making the process opaque and robbing customers of control.
AAs operate on a tight consensual basis, based on permission agreements between the customer, the bank, and themselves, as neutral third-party operators.
They are only conduits for data to pass depending on consent, and they are not permitted to view, keep, or use the data they handle.
The directives also include an IT framework for the AAs, which includes the consent architecture and operational procedure.