3 Ways Account Aggregators Can Save Time And Simplify Financial Applications For Loan Or Insurance Seekers

Anyone who has applied for a home loan or purchased a term insurance policy in the last decade must have gone through a process of logging into multiple banking portals, downloading statements, searching for the previous year’s income tax returns, uploading everything into a cumbersome lender portal, and waiting for a relationship manager to call, requesting the one document you missed!

India has developed world-class digital payment systems, but its underwriting culture remained stubbornly traditional for a long time. However, that is finally starting to change, and quite significantly. Interestingly, most of the end consumers in India aren't still aware of this agent of change called the Account Aggregator.

An Account Aggregator, or AA, is a framework regulated by the Reserve Bank of India that allows individuals and businesses to share verified financial data with regulated entities through a consent-based, machine-readable, real-time system.

“The AA itself never stores the data. It acts as a postman with a notarized receipt. This simple architectural choice is doing what Indian credit has needed for two decades: replacing trust in documents with trust in data,” says Venkatesh Krishnamoorti, Co-Founder & CEO of Saafe, a leading account aggregator.

The data supports the story. According to Sahamati’s Credit Reimagined H1 FY26 report, the framework facilitated approximately Rs 1.47 lakh crore in loan disbursal over 1.5 crore loans between April and September 2025, with monthly disbursals rising to about Rs 24,000 crore from Rs 14,000 crore in the previous half year. Roughly one in ten personal loans in India is now processed through AA infrastructure.

“The ecosystem now connects more than 780 financial institutions and 269 million customer consents. Considering it only went live in September 2021, that growth pattern resembles the rapid ascent of UPI rather than any other Indian regulation,” says Krishnamoorti, adding that this progress explains why the country’s largest public sector banks have moved AA from a pilot project to a core part of their digital lending strategies.

Recent board-level priorities at major lenders emphasize developing digital journeys for retail, MSME, and agriculture loans, creating a digital-assisted framework for customer convenience where staff and customers access the same data, and integrating advanced capabilities into loan management systems for MSME underwriting. Connecting to the Account Aggregator ecosystem, automating credit assessments, and embedding AI-driven analytics into the underwriting process are all key components. All rely on one fundamental element: structured, real-time, consented data - precisely what AA offers.

Removing the jargon, AA performs three functions that reshape distribution economics.

First, it eliminates the problem of collecting documents as a customer experience issue. A single consent retrieves verified data from banks, mutual funds, NPS, and increasingly GST filings, transmitting it to the lender within seconds. Customers no longer need to know passwords for bank statement PDFs, which might seem trivial but historically caused many drop-offs - often blamed on customer laziness when the real issue was the design of the process.

Second, it reduces rejections caused by poor data quality. “AA data arrives signed, structured, and directly from sources. Lenders like Bajaj Finance have publicly acknowledged a marked decrease in bank statement fraud due to AA. Bank statement tampering has been a hidden but costly problem in Indian retail credit, costing lenders thousands of crores after disbursal. AA closes this loophole upfront,” says Krishnamoorti.

Third, it makes automated underwriting more effective. Once data is structured, factors like salary credits, bounce history, average balances, and seasonality can be calculated almost instantaneously. This is where automatic credit scoring and AI-driven underwriting transition from ideas into reality. AA is also increasingly used for portfolio monitoring, early warning signals, targeted collections, and fraud prevention.

A lender who can monitor portfolios in real time can set risk premiums more aggressively at the outset, leading to cheaper credit for borrowers who might have otherwise been declined. While many frame AA as a credit story, that view is too narrow.

AA represents the moment Indian financial services stop outsourcing the cost of underwriting to the customer. For two generations, every Indian seeking credit or insurance paid an invisible tax - spending time collecting and scanning documents that could have been fetched at source. AA flips this burden, maintaining consent and privacy, which sets the Indian model apart from open banking initiatives elsewhere.

“The next two years will test its potential, especially in MSME underwriting where credit gaps are largest. A March 2025 PIB release explicitly named AA alongside TReDS and the Unified Lending Interface as key infrastructure to expand MSME credit access. Institutions that treat AA as just a checkbox today will find themselves behind the curve when consent-based data sharing becomes the default expectation for every Indian customer,” says Krishnamoorti.

That transition is approaching faster than many in boardrooms realize.

FAQs

1. What is an Account Aggregator?
Account aggregator is a new RBI regulated financial information ecosystem that enables individuals and businesses to share their verified financial information with lenders, insurers and other financial institutions seamlessly, through a consent manager.

2. How will Account Aggregators ease the loan application process?
Account aggregators ease the hassle of paperwork. Borrowers can get their bank statements, tax returns, and financial information fetched in a click. This will fast track approvals and minimise document fraud or human errors.

3. Why are banks and fintech firms looking at AA infrastructure?
Banks and fintechs want AA infrastructure to provide quicker underwriting, better credit evaluation, digitise risk assessment, and streamline their customers’ digital lending journey.