Consent-based open banking secures customer-controlled financial data sharing while requiring standardized consent, security, and grievance mechanisms.
Open banking in India relies on a consent-based data sharing model implemented via licensed Account Aggregators (AAs) which mediate API-driven transfers between Financial Information Providers (FIPs) and Financial Information Users (FIUs). AAs must obtain standardized electronic customer consent, cannot store or repurpose data, and operate under prescribed technical specifications, IT governance, data security, and customer grievance redressal requirements. The hybrid regulatory approach combines licensing and facilitation to promote innovation while addressing privacy, cybersecurity, liability, and supervisory challenges.