Data Empowerment and Protection Architecture (DEPA)

The Data Empowerment and Protection Architecture (DEPA) is a consent-based data-sharing framework designed to give individuals and businesses greater control over their personal and financial data while enabling secure and efficient data flows across the digital economy. In banking and finance, DEPA represents a foundational shift in how data is accessed, shared, and governed. In the context of India, DEPA is a cornerstone of India’s digital public infrastructure, supporting financial inclusion, innovation, and competition while safeguarding data privacy.
DEPA is not a single law or platform but an architectural framework that combines technology standards, regulatory oversight, and consent mechanisms to balance data utility with data protection.

Concept and Core Principles of DEPA

DEPA is built on the principle that data belongs to the individual or entity to whom it relates, and that sharing of such data should occur only with informed, explicit, and revocable consent. Unlike traditional data-sharing models where institutions control customer data, DEPA shifts control to the data principal.
The core principles of DEPA include:

• User-centric consent, ensuring individuals decide who can access their data, for what purpose, and for how long.
• Purpose limitation, restricting data usage strictly to the consented objective.
• Data minimisation, sharing only the necessary data rather than entire datasets.
• Security and trust, ensuring encrypted and tamper-proof data flows.
• Interoperability, enabling seamless data exchange across institutions.

These principles are particularly relevant in banking and finance, where sensitive personal and transactional data is routinely handled.

DEPA and the Account Aggregator Framework

In India, DEPA has been operationalised in the financial sector through the Account Aggregator (AA) ecosystem. Account Aggregators are regulated entities that facilitate the secure transfer of financial data between data providers, such as banks and insurers, and data users, such as lenders and financial service providers, based on customer consent.
The AA framework allows individuals and businesses to:

• Share bank statements, tax data, insurance details, and investment information digitally.
• Avoid repetitive paperwork and manual verification.
• Access financial products more quickly and transparently.

This model transforms data from a static institutional asset into a dynamic, user-controlled resource, enhancing efficiency across the financial system.

Role of Banking and Financial Institutions

Banks and financial institutions play dual roles within the DEPA ecosystem. They act as data providers, holding customer data, and as data users, consuming data to assess creditworthiness, design products, and manage risk.
Under DEPA, banks are required to:

• Share data only after receiving valid digital consent.
• Ensure data accuracy and secure transmission.
• Comply with standardised application programming interfaces.
• Maintain audit trails for accountability and compliance.

This framework reduces information asymmetry, improves credit assessment, and lowers operational costs, particularly in lending and risk management.

Regulatory Oversight and Institutional Framework

The implementation of DEPA in the financial sector is overseen by the Reserve Bank of India, which regulates Account Aggregators and prescribes operational, technical, and governance standards. Other sectoral regulators align DEPA principles within their respective domains, ensuring consistency across the economy.
Regulatory oversight focuses on:

• Consumer protection and data privacy.
• Cybersecurity and resilience.
• Standardisation and interoperability.
• Prevention of misuse and unauthorised data access.

This coordinated approach ensures that innovation does not come at the cost of trust or systemic stability.

Impact on Financial Inclusion and Credit Delivery

DEPA has significant implications for financial inclusion in the Indian economy. Many individuals and small enterprises lack formal credit histories despite having regular income and transaction records.
Through consent-based data sharing, DEPA enables:

• Faster and more accurate credit appraisal.
• Access to formal credit for small businesses and informal sector participants.
• Reduced dependence on collateral-based lending.
• Expansion of digital lending and customised financial products.

By unlocking data value while preserving privacy, DEPA supports inclusive and sustainable financial growth.

DEPA and the Digital Economy

Beyond banking, DEPA is designed as a cross-sectoral architecture applicable to health, telecommunications, education, and other domains. In finance, it complements India’s broader digital public infrastructure by enabling trusted data flows that support innovation.
In the financial ecosystem, DEPA:

• Encourages competition by reducing data monopolies.
• Supports fintech innovation and new business models.
• Enhances consumer choice and transparency.
• Strengthens trust in digital financial services.

These outcomes contribute to the deepening and modernisation of India’s financial system.

Risks and Challenges in Implementation

Despite its potential, DEPA faces several implementation challenges. These include low digital literacy among users, uneven institutional readiness, and cybersecurity risks associated with large-scale data exchange.
Key concerns include:

• Ensuring informed and meaningful consent.
• Preventing consent fatigue and misuse of permissions.
• Protecting systems from cyber threats and data breaches.
• Aligning DEPA with evolving data protection laws.

Addressing these challenges requires continuous regulatory vigilance, public awareness, and investment in secure digital infrastructure.

Macroeconomic and Systemic Significance

At the macroeconomic level, DEPA improves efficiency in financial intermediation by reducing transaction costs, speeding up decision-making, and enhancing risk assessment. Better data access supports credit expansion, entrepreneurship, and productivity growth.
For the Indian economy, DEPA:

• Strengthens the foundation of a data-driven financial system.
• Enhances resilience through transparency and accountability.
• Supports long-term economic formalisation and growth.