Sahamati, the brainchild of Aadhar architect Nandan Nilekani, is a contemporary framework aiming to digitize bank account operations. This framework operates as a Collective of Account Aggregator (AA) ecosystem. Established as a non-Government, private limited company, Sahamati seeks to streamline the process of collating information from all of an individual’s or household’s accounts into one convenient place. The structure of the AA is built on the Data Empowerment and Protection Architecture (DEPA) framework.
Data Empowerment and Protection Architecture (DEPA) Framework
The DEPA framework represents a shift in the management and processing of personal data, from being organization-centric to becoming human-centric. By empowering individuals with control over their data’s utilization, DEPA facilitates the collection and usage of personal data. This approach enables people to access essential services such as healthcare and finance in real-time while ensuring safety, privacy, and security.
Origination of Sahamati and Account Aggregator (AA)
In 2016, Reserve Bank of India (RBI) introduced Account Aggregator as a new class of Non-Banking Financial Companies (NBFC). The primary role of these aggregators is to assist in the transfer of user’s financial data, provided explicit consent is granted. But up until now, no effective mechanism for data sharing existed, even when users were willing to do so. Therefore, Sahamati was established to enable straightforward data sharing amongst financial institutions based on user consent. The account aggregator’s principal duties include providing services upon receiving individual clients’ explicit consent.
Understanding the Mechanism of Account Aggregator (AA)
The AA framework offers a digital platform that aids in the easy sharing and consumption of data from various entities, once user consent is obtained. The core function essentially involves data transfer, without storing client’s data. Classified as ‘data-blind’, the AA ensures that data passed through it remains encrypted. The prohibition of data storage further negates the risk of data leakage or misuse. RBI and other Financial Services Regulators (FSRs) are providing necessary regulatory assistance and guidance for rolling out this system. The potential of Sahamati could be broadened to include sectors like healthcare and telecom in the future.
Current Challenges and Need for Sahamati
At present, an individual’s data is scattered across various silos and islands in banks, telecom companies, and healthcare institutions. Without an existing framework for sharing this data with benefactors, individuals or entities must collect, collate, and share their own data, a slow and costly process. The absence of an integrating and aggregating framework results in an incomplete view of an individual’s or entity’s data, and the inability to access users’ data even with their given consent creates friction in data accessibility. Consequently, the transition to an ‘economic rich society’ from a ‘data-rich society’ remains unrealized.
Key Facts about Sahamati
| Sahamati Aspect | Description |
|---|---|
| Founder | Nandan Nilekani |
| Account Aggregator Framework | Based on DEPA Framework |
| Primary Role | Transfer user’s financial data with their explicit consent |
| Data Privacy | Ensures data flow through AA is encrypted and cannot be stored |
| Potential Expansion | Scope to include healthcare and telecom sectors |
Conclusion
Sahamati, as an AA ecosystem, is poised to revolutionize the way data is collected, shared, and utilized. By prioritizing user consent and data privacy, this system paves the way for secure, effective data management across various industries. With the potential for future expansion, Sahamati promises to play a significant role in driving the transition from a data-rich society to an economically prosperous one.
Last Modified: February 6, 2024