Should Account Aggregators Provide Information On Personal Purchases?

CAMS, a mutual fund transfer agency that provides Account Aggregator services, revealed that their new technology can share information with insurance companies that could indicate cigarette purchases, raising privacy concerns. In an interview, with the Live Mint, while talking about new technologies in the account aggregator space, Anuj Kumar, managing director at CAMS said:

“Frequent Rs. 16 transactions indicate cigarette purchases, information which, we can share with insurance companies.”

This information is particularly relevant to health insurance providers as they often require users to declare their smoking habits while underwriting their policies.

What are account aggregators?

Account aggregators are entities that enable data sharing from across various financial sector institutions.  In effect, AAs act as “consent brokers” for financial entities by allowing users to consent to their data being transferred. For example, users can consent to their data being collected and shared with their health insurance provider. They maintain a log of consent given by users which are called “consent artefacts”. Notably, customers can manage consent at all times and can choose to opt out of the programme.

Why it matters

While there were many privacy concerns, BG Mahesh, CEO of Sahamati, another account aggregator confirmed that only the financial entity asking for the information can view the information, not the AA. Yet, concerns about this technology persist.

Transactions do not indicate the product purchased and assuming that a certain transaction amount can indicate the purchase of cigarettes can be an unreliable source of information. This is particularly concerning as users can be charged much higher premiums if financial entities assume they are smokers or provide inaccurate information about their smoking habits.

Further, this raises questions of surveillance. While consenting to AAs is not mandatory, the widespread use of these services could lead to it becoming increasingly common. Users may be compelled to consent to this data tracking in order to get access to financial services. Tracking transaction data to track personal activities can be especially intrusive and infringe on users’ right to privacy.

Medianama has reached out to CAMS asking for a comment.

Also Read:

• Video: Briefing Call on Account Aggregators with Sahamati CEO BG Mahesh
• CRED seeks to become an account aggregator, here’s everything to know about the AA ecosystem
• Exclusive: RBI issues in-principle licenses to 5 Account Aggregators
• Account Aggregator ecosystem goes live with 8 banks and multiple fin-tech firms

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