Account Aggregator(AA) ecosystem is going live today.
Let's understand what AA is in this 🧵
Account Aggregators (AA) are non-banking financial companies, licensed by RBI, that act as a bridge, to collect data from Financial Information Providers(FIP), and share the data with, Financial Information Users (FIU).
FIPs can be banks that hold your personal financial data like banks.
FIUs can be lending agencies or wealth management companies that are providing financial services to you.
The data transferred from FIPs to FIUs is encrypted at the FIPs end and decrypted at the FIUs end.
The AAs themselves don't store any data.
The data is only shared after the user provides the consent.
Think of a case where you have to do a lot of document sharing with the financial service provider to access a service. The data is present across different accounts.
The process is tedious and time taking.
With AA, you can give consent for all the documents you want to share.
AA will potentially help in getting access to financial services really quickly.
It has the potential to increase financial inclusion.
Want to invest a lump sum amount in a mutual fund, but are concerned about timing the market?
Here's the risk-reducing way to do this. Check this 🧵
You may already be aware of SIP(Systematic Investment Plan), in which your money is transferred from your bank account to the fund each month to buy some units of the mutual fund.
But what to do when you have a lump sum amount and still want to get the benefit of SIP? 🤔
The first option is to keep the money in the savings account and continue SIPing.
Here, your idle money in the savings account would give you 3-4% of returns.