Customer data shared with account aggregators totally safe: FM Sitharaman

Finance Minister Nirmala Sitharaman on Thursday assured that customer data shared with account aggregators (AA) is completely safe in India.

Concerned over the slow movement of the AA scheme, she said, "It is not as much as I would want to see. It can be better, which means either the building of awareness exercises are not sufficient, adequate" or there is a need for simplification of technology.

"Banks, both public and private, have reviewed it with me once. Banks have become a member or a part of this account aggregators working, and it has actually helped," she said at the 'DATE with Tech' event here.

She stressed that the enthusiasm of the banks has to be accentuated, only then that it will reach every customer.

Allaying concerns about data security, she said, "Initially, there were some apprehensions that possibly, account aggregators are going to sit over data bank. They cannot hold data. They are just a pass-through. Neither the beneficiary customer nor the bank can sit on it through the AA. They will deal with it only for the purpose of giving credit".

Asked about what kind of assurance she can provide to customers, Sitharaman said the government's approach in creating public platforms for banking facilities ensures customer data protection.

"The moment you agree to be willing to give it, it will be shared without much hindrance. On data protection, I can assure Indian citizens your data remains completely safe," she said.

Account aggregators (AA) are entities that enable financial data sharing from Financial Information Providers (FIPs) to Financial Information Users (FIUs), based on the consent from the customers.

On low insurance penetration in India, Sitharaman said there have been experiments by Scheduled Commercial Banks to increase the penetration.

Insurance companies will have to be a lot smarter by adopting technology tools and addressing last-mile distribution of their products, she added.

"There is a need for insurance companies to become a lot more tech-ready and through technology, but because insurance is such a sentimental matter. You still need a human interface. Insurance companies will have to adapt technology, bring in more personnel, who can go to the field and only then can we achieve greater and wider insurance coverage," she said.

Insurance penetration in India during 2021-22 at 4.2 per cent remained the same as in 2020-21.