Gig workers denied financial services: the role of data

By Ali Hamriti, CEO and Co-Founder at Rollee


There are 4.4 million people working for gig economy platforms at least once a week in the UK today who contribute £20bn to the UK economy. They are a rapidly growing population, and this growth has been amplified with the cost-of-living crisis which has forced 5.2m workers to take on extra jobs.

There are several benefits of having a diversified income. With multiple incomes, a worker can gain more financial security than in a single job. For example, if one of several jobs is cut down, you can still invest your time in other ventures. Another benefit of having several incomes is the gain of flexible work. A worker can focus on the income that delivers the most at a given time, and flexibly shift to his other activities if the income is stagnating.

Yet with the attractive benefits of greater financial freedom and income security, many independent workers find themselves experiencing unequal access to financial services such as mortgages or loans. In fact, the findings in The Hidden Cost of Gig Worker Living report from Rollee, reveals that 7 in 10 UK gig workers have been denied access to basic financial products such as a loan, despite having a good credit score.

Of 1000 gig workers surveyed, over a quarter (27%) of gig workers have had to apply to three different lenders before receiving access to a credit card or loan. In addition, over half (52%) of gig workers have lost out on a new home due to being declined by a bank or building society, despite knowing they have affordability.

Ali Hamriti

This research reveals the level of financial exclusion gig workers are facing. The struggle they experience is not because they can’t afford a loan or mortgage, but because the current credit scoring system is not set up to verify their way of working – their multiple records of income and employment data.

A cue for change

Self-employed gig workers need a fair chance to be able to prove their solvency to financial institutions. As the number of independent workers continues to rise, it is vital that financial organisations find new ways to gain full visibility of gig workers employment data to assess them fairly, and ensure they are not excluded from financial products.

Financial institutions currently operate manually to verify and administer the employment and income data of an individual. When verifying someone with one regular source of income, this process quickly recognises this record as a stable income. With gig workers earnings coming from different sources from one month to the next, financial institutions are tasked with tracking down different data records which are separated and dispersed from one platform or record to another. This makes it painfully time-consuming for financial institutions to verify an individual’s employment and income data making it difficult to make decisions such as granting mortgages. This slow and risky process means that independent workers face a long journey of delays, and sometimes barriers, when proving their solvency to financial institutions.  Often, financial institutions do not have the time which results in workers being denied access to financial services and business being lost in the process.

To avoid this everyday reality, financial institutions need a way of doing deep and complete analysis of a worker’s activity and earnings. This requires adopting a fully digitised process to gain full visibility and transparency of multiple dispersed data sets in real-time.

The first step is data automation. This plays a key role in consolidating and standardising the data so that time-consuming manual processes can be avoided. By doing so, the analysis of income and employment data can be done much faster saving time, money and helping to speed-up decision-making to support business conversions.

Added benefits

In addition, by using one central, monitored system to analyse data in, the financial institution can gain greater transparency to guarantee the reliability of the data and protect against fraudulent documents.

The adoption of digital processes can also help to empower individual workers to remain the owner of their own data, giving permission to share on-demand access to the data without sharing the data itself. Gig platforms can also do more to facilitate inclusivity of financial services by making their workers’ data sharing easier and on a consent basis.

One other thing that needs to change is the way that credit scores are calculated. Today’s calculations are outdated and don’t consider the new work habits and the multiple incomes that independent workers can accumulate.  The Financial Conduct Authority (FCA) must play a role here to help revise the rules that financial institutions have to follow to make credit score calculations a fairer assessment to independent workers.

An inclusive future

As the number of independent workers grow and accumulate multiple income streams, financial systems must change so they can verify employment and income data to stay competitive. It will be the only way to do business with a growing market which represents the customers of today and the future.

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