Integrating account aggregators into the loan application process

A design policy and framework for loan application process for account aggregator.

Context:

Have you ever applied for a loan and been frustrated by the amount of paperwork involved? Or maybe managing your finances feels overwhelming with accounts scattered across different institutions? The Account Aggregator ecosystem, introduced by the RBI in 2021, aims to simplify these processes. Here’s the breakdown:

• Account Aggregators (AAs) act as secure bridges connecting your financial data to institutions. With your consent, AAs can retrieve your financial information from various sources.
• Financial Information Users (FIUs) are institutions that need your financial data to provide you with a service. Example — banks offering loans.
• Financial Information Providers (FIPs) are the institutions that hold your actual financial data. Example — your bank where you have accounts.

Here’s the magic: AAs allow FIUs to request your financial data directly from FIPs with your permission. This eliminates the need for manual paperwork, making data sharing between institutions easy and secure.

Goal:

In 2023, IDEO partnered with Sahamati (a not-for-profit organization advocating for a secure Account Aggregator ecosystem) to design a reference journey and templates for integrating AA into financial products. Building on IDEO’s work, we volunteered in an AA UX working group, collaborating with Sahamati. This case study showcases our designs for integrating Account Aggregators into the loan application process.

Loan application process flow

Let’s illustrate the user flow using the example of Roshni, who is seeking a personal loan to renovate her home.

Flow diagram for the loan application process

Initiating the loan application

Roshni begins her loan application journey by specifying the purpose of her loan and considering whether to apply with a co-applicant. To assist her in this decision, we’ve integrated an option for her to check her CIBIL score. This score, ranging from 300 to 900, reflects creditworthiness based on past borrowing and repayment behavior (excluding savings, investments, and fixed deposits). A score of 750 or above often indicates strong creditworthiness, potentially eliminating the need for a co-applicant.

Entering loan details and choosing whether to apply with co-applicant

To check her CIBIL score, Roshni provides basic details and verifies her identity via a one-time password (OTP) sent to her phone number. Upon reviewing her score, which is above the ideal range, she decides to proceed without adding a co-applicant.

Flow to check CIBIL score

Introducing Account Aggregators and sharing bank statements

Roshni moves forward to choose her preferred method for document sharing. This marks the initial introduction of account aggregators into the process. Opting for the AA option prompts a comprehensive explanation of its advantages and associated steps, that align with the established principles for an optimal AA flow. This approach ensures that Roshni is well-informed about the process and receives clear guidance every step of the way.

Selecting the method to share documents

Before sharing her bank statements, Roshni must verify her Aadhaar and PAN details, a process completed via OTP sent to her phone number. Once verified, basic details and contact information are automatically added to the loan application, minimizing errors and expediting the process. She can then review this pre-filled information for accuracy before proceeding further.

KYC verification and reviewing the uploaded data

The final step involves sharing bank statements through AA, a flow already designed. This encompasses selecting an AA, sharing statements from all bank accounts, and receiving a receipt upon completion. With this, the primary flow of the loan application process concludes, and the loan application is successfully submitted.

Screens from the consent sharing flow via AA designed by IDEO

Alternate flow 1: Co-applicant flow

If Roshni’s CIBIL score falls below the ideal range, she is prompted to add a co-applicant for a more favorable outcome. Roshni adds Ravi as a co-applicant by entering his name and phone number. This information will be used to invite Ravi to share his details and statements in the subsequent step of the process.

Adding co-applicant details

As the primary applicant, Roshni can send Ravi a link (via the ‘ask co-applicant’ button) to invite him to share his statements. On opening the link, Ravi goes through the process to securely share his bank statements and other necessary details. Once both applicants have shared accounts, the flow concludes, and the application is submitted.

Inviting co-applicant to share information

Alternate flow 2: RM driven flow

In certain scenarios, a Relationship Manager (RM), representing the lending institution, assists the applicant in completing the application. They guide the applicant through the process and help complete the application for them. We’ve also designed a variation for such scenarios. In this setup, the RM sends a link requesting to share information and bank statements directly to Roshni and her co-applicant Ravi. This arrangement allows the RM to conveniently monitor progress, facilitating seamless tracking from their standpoint.

RM’s perspective to invite applicants and track their progress

Closing thoughts

This case study highlights the potential to make applying for loans easy. Engaging in the design process while collaborating with banking professionals was a valuable learning experience. Looking ahead, the integration of Account Aggregators into services and emerging apps like Fold, seems to represent the future and I’m eager to see how designers continue shaping this space.

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