What is Fintech Aggregator: Important Things You Need to Know
Another day, another fintech innovation takes the spotlight. You may never hear of a fintech aggregator, but there’s a high chance you have used its services in the past. What is it, and how can it benefit you? Read on to learn more!
What is a fintech aggregator?
Think of a fintech aggregator as your most trusted confidant with a vast knowledge of finance. You trust them because they know your spending behavior and what you want and need. It’s also easy to understand them. But they’re not human; they’re a platform that can help you decide which savings product, investment, insurance, and credit card is the one for you.
Fintech aggregators are especially attractive to beginners or people who don’t really have the time to learn the pros and cons of financial services. “You can always Google what you don’t know, though,” you may argue. However, even Googling can take time. Searching through financial products one by one, listing each of its advantages and disadvantages, and finally contacting its sales rep to register cannot be done instantly. With a fintech aggregator, you can do so in a few taps or clicks on only one website.
How does a fintech aggregator work?
If you open a browser tab and type “best credit card” in the search bar, you may find several fintech aggregators. They do not recommend one particular product over the others. Instead, they give you an extensive list of the best credit cards in your region, complete with all the information you need.
Fintech aggregators have direct access to the product information of several banks and institutions through partnerships. Moreover, fintech aggregators also implement open API to access valuable customers’ data. This way, they know what a customer is looking for based on their search history, current bank accounts, and other records. Open API allows aggregators to see readily available data without connecting to each institution individually, which would be costly and lengthy.
Why should customers use a fintech aggregator?
Generally, aggregators have two customer bases: users and financial institutions. For users, aggregators are there to give financial advice. If you’re confused about which financial products to choose, you can go to any fintech aggregator website and find all the information.
There, you can see the fees, benefits, credit limit, terms & conditions, and any other valuable information about the product that you might not be able to find had you not used an aggregator’s service. Sometimes, an aggregator’s site offers a limited discount if you purchase a product or service there. This is a good alternative if you don’t want to engage with many salespeople.
Meanwhile, financial institutions can access data gathered by the aggregators and have their products commercialized. It’s a win-win-win situation.
OJK’s regulation regarding fintech aggregator
In Indonesia, the Financial Services Authority (OJK) oversees the business flow of all fintech companies, including fintech aggregators. Since December 2020, OJK has approved a total of 36 aggregators, which you can check in their development of digital finance innovation report.
Fintech aggregators that are deemed legal by OJK must comply with the rules arranged in POJK No. 13/POJK.02/2018. Users must be careful in giving personal data, especially when signing up for an aggregator’s site. Always check for an OJK logo on the site to be sure.
Now you know what a fintech aggregator is and how it can help you find the best financial product or service according to your needs. The incredible work of fintech aggregators wouldn't have been possible without implementing open APIs like those you can deploy through Ayoconnect, Indonesia's largest open finance platform. Click here for more information!