As an idea and a technology concept, Account Aggregator (AA) responds to the demands of a digital economy, necessitating the democratization of data for expanding financial services access. With its gradual mainstreaming into the Indian banking parlance, our previous blog post took a deep dive into its origin and the benefits that BFSI institutions stand to reap by being onboard the AA ecosystem. Nevertheless, while the conservatives stand to miss the first-mover advantage to innovate on a platform, that is, by law, the way forward, gaining AA awareness is only winning half the battle! What characterizes an excellent AA solution, and how are the benchmarks defined for a successful implementation for those willing to transform?
In recap to the ongoing discourse, the AA framework came into existence through an inter-regulatory collaboration and rests on three pillars: The Account Aggregators, RBI-approved NBFCs mandated to extract, aggregate and transfer, but not read or store encrypted financial data of the BFSI service customers, the Financial Information Providers (FIPs), acting as the source, and Financial Information Users (FIUs) representing the point of consumption for the digitally consented personal and business data channelized through the AAs. However, Technical service providers (TSPs) are a keystone species in the AA ecosystem, collaborating with the FIPs and FIUs for delivering AA-enabled products and services. Their interventions include the development of the foundation modules, underwriting models, SME scorecards, Digital Lending & Onboarding Systems, OCEN-based products, Early Warning monitors, and much more.
Perfios, as a pioneer in real-time financial analysis and decisioning space, has been quite early in apprehending the future of Indian banking amidst data-driven realities. It possesses the vision and proven capabilities to define the norms of capitalizing on the Indian financial data landscape that AA is gradually opening up. Convinced that unprecedented democratization of data is where financial services delivery in the country is headed in the upcoming days, Perfios, a Sahmati-empanelled TSP, invested resolutely in developing a comprehensive FIP/FIU solution stack. The inspiration behind it? To be a frontrunner in nurturing and shaping a phenomenon that is just kicking off with the banking in India yet harbors transformative implications for the discourse on data and data privacy/ownership. Accordingly, Perfios AA-solutions targets ease of adoption and simplicity alongside many other industry-first attributes. The modules seamlessly plug an FI's existing systems into the NBFC-AA ecosystem, allowing turnkey operations of the complex integration architectures, enabling its role as an FIP or FIU. Thus, lenders intending to embed AA as an additional applicant data source in their onboarding journey can do so with little change management and effort.
In this attempt to technologically pilot a shift that can potentially rewrite the banking story in a young and aspirational nation like India, Perfios has emerged as no short of a trailblazer. What does a competent AA-solution implementation for an FI look like? Over the days, the answers have become subterraneously linked with the standards pronounced by the global financial data analytics leader. Unsurprisingly, the fact that Indian banking majors across the public and the private sector are making a beeline at the Perfios Sales Desk acknowledges the company's continuous endeavor to make AA-solutions functional and empowering for the banks and their customers alike. Factors that bolster the case include but are not limited to:
The pivot for the success of the AA framework in India lies in the broad-spectrum integration and interoperability of its participants, amplifying the monetization potential of the shared data. Interestingly, since the inception of the AA framework in September 2021, the ecosystem has consistently expanded to include over a hundred financial institutions, more than a dozen AAs, and 10+ TSPs. As mandated by ReBIT, the FIP/FIU stacks of an FI must be scalable and auto-compatible with all the current and future AA ecosystem participants, catering to every possible choice of its applicants. To pull this feat, a TSP must rigorously test the FIP/FIU implementations with ecosystem participants to ensure interoperability and service availability under all scenarios.
Here, Perfios leverages its heritage as a highly trusted financial data analytics provider and its ecosystem-wide partnership with financial institutions and other stakeholders, including the market regulators, tax authorities, and civil utility vendors. The deep integration that has propelled products like InteGREAT to resounding success places Perfios in a unique position to build and test FIP/FIU products in a much broader context than its peers and ensure their availability in every situation. Further, the Perfios FIP/FIU modules are auto-updated to meet the requirements of the evolving AA ecosystem. Besides guaranteeing platform readiness as new databases like SEBI, ITR, GSTN, PFRDA, and TD/TR are plugged into the system, Perfios ensures richer underwriting insights for the FIUs. But formidable as the solution may sound, it is available on demand by a bank or NBFC, scaled as per their requirement on the Perfios multi-tenant cloud.
In addition to simplifying underwriting and credit access, the AA framework aims to unleash product innovation at scale, allowing the monetization of financial data across horizontal and vertical use cases. However, for such evolutions to be possible, FIU modules must be agile enough to align with the existing AA ecosystem state and allow easy integration with various product journeys, third-party applications, and databases. In fact, minimal code changes and configurations directly translate into a faster and more affordable rollout of the use cases.
Reiterating that Perfios FIU module is self-evolving, it is to be stressed that besides excellence in cross-analysis, the legacy of InteGREAT has consolidated the company's position as a global pioneer in low code platform focused on multiparty use cases for the financial sector. Based on the requirements of an FI, the Perfios FIU stacks throw open a horizon of AA-driven opportunities ranging from hyper-personalized offerings, third-party onboarding, collections-contact tracing, wealth management, credit monitoring, escrow account monitoring to business finance management. Further, the Perfios FIU allows data fetch on an automated and ad-hoc basis, ensuring complete regulatory compliance. Thus, while significantly reducing the workloads of the FI's data administrators, it can improve customer satisfaction, deliver better advisory, leverage insights to improve products and inflate revenues through cross-sell/up-sell.
The previous blog in the series talked at length about how AA-driven systems can alleviate a range of vulnerabilities that currently compromise the Indian banking practices' security. However, to avail the full coverage, it is critical to ensure the integrity of the FIP/FIU solutions, both during implementation and in operation. As India ranked third in global data breaches in 2021, it is understandable for a typical banking customer to be apprehensive. In response, to win customer trust, the TSP needs to have the proper certifications and must adopt a multidimensional approach incorporating physical security, Identity Access Management (IAM), Application Security, Process Security, and Cyber Security.
Perfios as an institution has a near-obsessive inclination on data security that has been seamlessly extended to its FIP/FIU business line. It is an ISO27001 certified data services vendor that also possesses a series of certifications by Plynt and Trust Guard. Additionally, Perfios systems are audited by CERT-IN and banks, conducting over 70 sessions annually. Besides ironclad physical security, the company has the MFA enabled for all accesses. All attempts are logged and audited, and the APIs adhere to OWASP rules. Further, Perfios has a strong Change Management culture to exercise absolute control over the development and maintenance of its FIP/FIU products. It conducts secured code review and VAPT for its FIP/FIU implementations quarterly and has an elaborate internal/external audit regime, with the logs maintained for high orderability.
A robust customer support mechanism by a TSP is as essential as its data security measures, instilling confidence and trust in its client. It should collaborate seamlessly with a bank or NBFC in addressing concerns and restoring business as usual within minimum downtime. Besides its technical excellence and innovation, Perfios is acclaimed industry-wide for its holistic approach to customer support. As a TSP, it maintains a dedicated customer success team staffed by industry veterans for query resolution, incident response, and grievance redressal channelized through a transparent escalation matrix. Additionally, Perfios maintains a functional RBAC customer support portal, libraries of MIS, and audit reports and continuously monitors the health of the connected systems.
The ingenuity of the Perfios solutions is that it allows banks and NBFC to reach out beyond conventional business channels and explore the latent credit market opportunities available in India, using the AA and OCEN framework. Using the Perfios LSP Bridge Platform, an FI can partner with the marketplace, fintech, or vertical aggregators to extend lending facilities through their environment. The architecture integrates the LOS, LMS, BRE, Payments, and Collections systems of an FI with the partner's business environment using REST APIs, creating a continuous journey for the applicants. Perfios FIP/FIU/LSP bridges can be integrated with several systems and leveraged for pitching various products, including Working Capital loans, Invoice discounting, Supply Chain Financing, Personal loans, Vehicle Loans, and much more.
The writings on the wall are more evident today than ever. With the AA-ecosystem gaining criticality at an increasing pace and the passing of the (Personal) Data Protection Bill (DPB) by the Parliament just a matter of time, the mainstreaming of Open Banking in India is inevitable. For the FIs, the need of the hour is not just to prepare but to prepare right and stay competitive in a future that is almost certain to be disruptive.
Like always, Perfios, in its role as a TSP, has not only built an array of exceptional products but, in the process, has rewritten the entire industry playbook on the evaluation and adoption of future-ready FIP/FIU solutions. Nevertheless, the story tends to continue! Once adopted, should the FIs market the AA-enabled digital platform as a separate business or just an added feature in the customer onboarding journey? Stay tuned for the answer in our next blog...