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About IndiaStack

IndiaStack is a set of APIs that allows governments, businesses, startups, and developers to utilize a unique digital Infrastructure to solve India's hard problems towards presence-less, paperless, and cashless service delivery. APIs include Aadhaar, eKYC, UPI, Digilocker, and eSign. The Open API team at iSPIRT has been a pro-bono partner in the development, evolution, and evangelization of these APIs and systems.

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Expert Collections containing IndiaStack

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

IndiaStack is included in 1 Expert Collection, including Digital ID In Fintech.

D

Digital ID In Fintech

268 items

For this analysis, we looked at digital ID companies working in or with near-term potential to work in fintech applications. Startups here are enabling fintech companies to verify government documents, authenticate with biometrics, and combat fraudulent logins.

Latest IndiaStack News

Explore opportunities through Open Banking

Dec 9, 2021

The expectations of consumers and small businesses have changed dramatically with regard to access to financial services. The “traditional” banking model has changed to now use data as a catalyst for new products and business models. In this process of transformation, Open Banking is undoubtedly one of the most critical levers for the development and introduction of new approaches to financial services. To put it simply, Open Banking refers to the possibility of accessing customer data historically kept internally by banks. Using application programming interfaces (APIs) to access this financial data provides a great opportunity for fintech organizations to meet consumer demands for new and better services. Applications focused on managing personal finances, comparing accounts and accessing credit services are just a few examples, but the potential is much greater. As various countries take different approaches to open banking, through this article we aim to explore how open banking is implemented in two very different markets – India and Australia. Fintechs with global ambitions can base these results to create new synergies that can further support their growth aspirations. The Indian approach to Open Banking Unlike the Open Banking initiatives seen in Australia and the United States, which are either fully regulated or market driven, India has adopted a hybrid model where the market and government play an active role in ecosystem development. India’s foray into Open Banking grew out of IndiaStack – a ten-year-old initiative made up of multiple APIs that aim to create a unified software platform for governments, businesses, startups and developers. . The country’s Unified Payment Interface (UPI) is one such subset of IndiaStack that has been instrumental in accelerating the digitization of payments in India and is considered one of the systems for world’s most innovative real-time payments. Other key components of IndiaStack include a collective of account aggregator ecosystems and the Data Protection and Empowerment Architecture (DEPA) – a proposed framework that aims to create a data sharing infrastructure based on the consent using account aggregators to accelerate financial inclusion. The Account Aggregator system is a universal architecture being built for all industries, not just finance. The Reserve Bank of India (RBI) grants licenses to any person / institution who can become a financial account aggregator. Currently, 6 account aggregators have been approved by the RBI. AA cannot store or process user data, but only allows encrypted flows between FIPs (Financial Information Providers) and FIUs (Financial Information Users) once the user consents. AAs will improve the user experience and significantly streamline the availability of credit for individuals and SMEs. Rural businesses, for example, without access to traditional financial institutions and with little or no credit history can now use as little as their phone or electricity bills as a credit history for a lender to extend credit. The framework could ensure more equitable access to credit by improving accessibility between banks and entities requesting data such as credit platforms, mortgage brokers or accountants. Concerns in India Implementing a technological solution for data transfers in the absence of a legal framework is proving to be a challenge. The Indian framework of Open Banking raises three major concerns: 1. Data security – The regulatory framework allows for the sharing of large amounts of sensitive personal information to a potentially unlimited number of entities without a specific purpose, as a clear definition of who can access the data has not yet been defined. 2. Financial self-regulation – It is proposed that AA self-regulate under the umbrella of the Sahamati industry body. AA is the prescribed best practice for data security, however, financial self-regulation remains dangerous. Many models fail due to the propensity of self-regulatory organizations to allow their members to relax standards and ignore cases of fraud. 3. Informed consent – With extremely low digital literacy in the country, millions of users would be unable to freely choose to share their consent, especially when strong financial incentives exist for AA. Australia is revolutionizing banking and consumer data Australia’s regulatory-driven approach to Open Banking is distinguished by its innovative scale of ambition. The bank is just the first sector of the Consumer Data Right (CDR), a data policy initiative to enable the safe and secure transfer of consumer data. Subsequent applications will be in energy and telecommunications before potentially moving to all other sectors. The Federal Treasury is the lead agency of the CDR and, in addition to the responsibility for the overall program, it is responsible for drawing up the rules for implementing the CDR. The Australian Competition and Consumer Commission (ACCC) and the Office of the Australian Information Commissioner (OAIC) ​​are jointly responsible for monitoring compliance. Requests for accreditation should be directed to ACCC. Authorized Depository Institutions (ADIs) are data holders mandated to share data so that consumers can consent to Authorized Data Recipients (ADRs) to access their bank data. A phased approach was implemented, starting with the big banks – ANZ, Commonwealth Bank, NAB and Westpac sharing savings and credit card data and later embracing all other types of financial information. Major banks have completed the implementation while non-core banks are required to complete it by February 1, 2022. Similar to the account aggregation framework in India, Australia announced that intermediaries can now be used for consumers to share data with trusted advisers who no longer have to go through the lengthy accreditation process and expensive. This amendment is expected to stimulate industry growth by reducing barriers for new entrants to develop applications. All accreditation models are: 1. Unlimited ADR (existing) – For organizations with multiple potential use cases such as banks, technology providers, brokers, etc. This will require a full and unrestricted ADR, the most complex, expensive and longest of the models. 2. Sponsorship model – This model allows organizations to access CDR data through a sponsor which is an active and unlimited ADR. Sponsored accreditation which is a lighter accreditation process is required. With less upfront and ongoing costs, this model is best suited for businesses with larger / ongoing CDR use cases. 3. Representative model – This model requires a commercial agreement with an unrestricted primary ADR and CDR representative. Although disclosed to the regulator, there is no official accreditation outside of this business relationship and can only be with one principal. ADR holds all the data and is fully responsible for the representative. 4. Collection of Outsourced Service Providers (COSP) – This template is intended for service providers who collect data for unrestricted ADR. Although no accreditation is required, the supplier will still have to comply with the rules, possibly audited and ADR will be responsible for the supplier. 5. Trusted advisor – This model allows professionals such as brokers, financial advisers and accountants to receive full access to CDR data through an ADR without being itself accredited. ADR verifies the identity and registration of the advisor. 6. CDR Information – For lower risk purposes, this can be used by anyone who needs to use CDR data to verify identity, income, expense, ownership, etc. of their client. Although no accreditation is required, ADR will process the data and can only share the result. Potential synergies between the two markets Startups creating new products in financial services and with global ambitions will need to put in place the required mechanisms from the early stages of development, whether or not a full regulatory framework is formulated in India. Australia is at the forefront of security practices and consent guidelines, while India’s payments infrastructure is already the gold standard for payments globally. Before entering any other market, Indian companies may first need to assess the investment in the actual collection, processing and compliance of user data. Open banking practices and requirements vary from country to country, and mechanisms for communicating standards or aligning standards between jurisdictions have yet to be put in place. When expanding into Australia, a collaborative approach by working with an accredited data recipient in the region will help reduce time and costs. One of the most suitable access models for the business can be used to ensure rapid implementation. CDR in Australia is expected to expand to action initiation soon to allow third parties, with the consumer’s consent, to initiate actions beyond requests to share data. India’s tight integration with UPI already means payment initiation is possible and construction services that require it in Australia will be efficient. Fintechs in India are already innovating in payments, and CDR in Australia could make payments without considering the underlying payment rails and patterns. The next phase of the data economy will have seamless cross-border integration and companies with experience in multiple jurisdictions will have the benefit of enabling interoperability between regions. Fintechs now need a long-term strategy that can successfully participate in these new and evolving environments, collaborating with the right technological tools to build their capacities. Businesses need to recognize that customers will soon have full control of their data, whether it is the marketplace or the regulation that drives this change. The author, Rehan D’Almeida, is Head of Strategic Partnerships and Marketing at Fintech Australia. Opinions expressed are personal cnbctv18-forexlive-benzinga Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.

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