MAdtech Point: Decoding the role of account aggregators

Subscription revenues are growing but in a market like India, ad funded content will remain salient for some time to come. It is advertising that will continue to fund the publishing ecosystem. Image: Shutterstock

As a consumer, our financial information is extremely valuable. Secure exchange of our financial data creates better value for us across our banking, financial and insurance needs. A very strong ecosystem is emerging now to manage this value exchange and some of the biggest and the best innovations in India are coming out of this ecosystem.

The main participants of this ecosystem are all the Financial Information Providers (500+ FIPs) like Private Sector Banks, Public Sector Banks, Foreign Banks, Health Insurers, HFC, NBFCs etc., and the Financial Information User (FIUs), technology service providers (50+ TSPs) and account aggregators (13+ AAs). Typically most of the FIPs on the supply side are FIUs as well on the demand side, making this a tightly closed loop ecosystem. All the members of this 1000+ strong and growing FinTech ecosystem are regulated by the Reserve Bank of India under a clear operating license.

In the FinTech ecosystem, account aggregators have played a critical role in connecting the demand side with the supply side without any friction. An average consumer need not have to travel hundreds of kilometres from their hometown to the nearest city just to give their collateral papers or bank statement to lending banks.

Also read: MAdtech Point: What will happen when third party cookies get totally deprecated?

Download the AA App and share your data directly with the lending bank. Skip sharing personal and sensitive information with intermediaries and agents. Sahmati, through a harmonious adoption of an account aggregator framework, enables this value exchange. When a customer gives consent to an account aggregator (AA), it collects your digital financial data from one or more of your accounts, and delivers it to the financial institution that is providing services like loan or insurance to you.

Now let us try to draw some parallels to this with the MAdtech ecosystem. Secure exchange of our online behaviour data creates better value for us across content, community and commerce requirements. The main participants of this ecosystem are all the advertisers, publishers, technology service providers (DSP, SSPs etc.,) and advertising agencies. This is where the similarities stop; and the differences with the Fintech ecosystem emerge.

Also read: MAdtech Point: If advertising will no longer run the Internet, then what will run the Internet?

For starters, there is no regulator for the MAdtech ecosystem, resulting in poor role clarity for all the participants. For example, in FinTech, a bank will not be allowed to play a role of an account aggregator, whereas in MAdtech, all participants can play all roles across the ecosystem. As a result of this, today, advertising revenues are not truly following the consumers, so much so that 65% of the revenues are with platforms where only 35 percent of the consumers are going. This is also complicated by the fact that we as consumers, do not value our online behaviour data as important as our financial data and have consented to offer it for FREE.

Without a proper consent management framework, third party trackers with no accountability whatsoever, have created this imbalance in the value exchange. Privacy regulations all across the world, including Digital Data Protection Act in India helps in correcting this imbalance.

Also read: Why adtech needs to focus on privacy-compliant personalisation

The obligations of securing, managing and updating consent helps in clarifying the roles for all the participants in the ecosystem. Today most of the publishers are advertisers; and most of the advertisers are wanting to be publishers too. Both of them have appointed their own technology service providers (DSPs and SSPs) and account aggregators (read advertising agencies) without any framework where are these participants are connected. Now imagine what a framework like Sahamati can do to the MAdtech ecosystem.

Some thought starters:

1. Can the Data Protection Board play the role of RBI in clarifying the roles for advertisers, publishers, technology service providers (DSPs and SSP) and account aggregators (advertising agencies)?
2. Can the advertising agencies truly perform the role of an account aggregator in connecting the demand side with supply not only with impressions but also with identities?
3. As such DSPs are wanting to become an SSP and vice versa. Will the consent management framework force them to close ranks and integrate their technologies sooner than later? Will there be a choice?

Today, advertising and sponsorships helps publishers fund their content production needs three times to one. Subscription revenues are growing but in a market like India, ad funded content will remain salient for some time to come. It is advertising that will continue to fund the publishing ecosystem.

Also read: Privacy Sandbox: What Google needs to speed up deprecation of cookies

Secure exchange of our online behaviour in a transparent manner creates a balanced value exchange and the consent management framework, exactly enables that. Advertising agencies in the form of account aggregators can play a very responsible role in managing this. They need to reinvent themselves and believe that they can play the role of account aggregators and not leave it to the technology service providers to do that job.

The bigger question is this. There is only one consumer. They do not differentiate Fintech from MAdtech. These are our terms and definitions. Privacy regulations too, do not distinguish FinTech from MAdtech. They have made the consumer, the primary data principal, be it for advertising or finance. They have also prescribed the obligations of the data fiduciary, whether it is a bank or an advertiser or a publisher. Then why cannot we make the Sahamati framework applicable and relevant for MAdtech as well? Why reinvent the wheel and duplicate costs? Well that is for another week…

Gowthaman Ragothaman is a 30-year media, advertising and marketing professional and CEO of Aqilliz, a blockchain solutions company for the marketing industry.