State Bank of India Managing Director Ashwini Kumar Tewari expressed concerns over the Account Aggregator’s mechanism of obtaining a single consent from customers for all financial services products.
Tiwari said that most customers do not read the fine print and often sign up without understanding the details. He highlighted that a single consent from the customer is used across all financial services products, including lending, signing up for wealth management, and account openings.
What is an Account Aggregator?
An Account Aggregator (AA) is a Reserve Bank of India-regulated entity that acts as a consent-based data intermediary.
The Account Aggregator framework was introduced by the Reserve Bank to enable the easy sharing of data between financial institutions for quicker decision-making. There are as many as 225 million users on AA at present.
Key concerns
The SBI MD said that customer consent is obtained only once, and customers do not read the fine print before authorising and end up signing up without understanding.
“I am a little worried about this… Nobody understands the fine print. And they give a single consent for everything. Is that ok? Probably not,” Tewari said.
The top banker added that we are in an era where privacy has become increasingly important, with laws like the European Union’s General Data Protection Regulation (GDPR), and we operate with such a set-up in India, where customers may lack understanding.
The SBI chief further noted that the self-regulatory organisations for the fintech sector have not achieved any success in getting the right solution to the problem, he said. He urged the industry to come together and solve the issue by building the right safeguards, warning that otherwise, the regulatory apparatus may intervene with a ban, as it did with real-money gaming.