Account aggregators could help the country democratize credit

Account aggregators (AAs), with their user interface, will play a pivotal role in closing the trust deficit between FSPs and consumers.

First, they permit users to control who gets access to their data, track and log its movement and reduce the potential risk of leakage in transit.

Second, a single-window format allows user-friendly data movement and reduces the need for physical transfers and post-facto attestations. AAs create a default industry standard for consent that cuts through the dense fine print buried in most privacy policies.

Finally, with the security of this data as a given, AAs allow lenders (or other FSPs for that matter) to rely on a wider selection of data points to determine the trustworthiness of a borrower and their existing track record, thus lowering the risk associated with deploying financial products. More data points and lower risk allow FSPs to craft tailor-made products by innovating on smaller-ticket loans and also offer flexible repayment schedules, thus reducing the likelihood of default. It gives FSPs space to allow businesses with non-traditional models or credit backgrounds to participate in the financial ecosystem.

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