Gig Workers Denied Equal Opportunity to Financial Services - A Cue for Change

Gig workers 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. From delivering takeout in the evenings, providing a taxi service or freelancing, this group of employees are combating the stresses of the cost-of-living crisis with additional work. In addition, with the rise of the creator economy and gig platforms, there are so many options for people who wish to have a varied career. People either have the freedom to be a sole trader or specialise in more than one profession at a time. The opportunities are endless, and therefore people’s source of income is increasingly diversifying.

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.

However, gig workers face some challenges that come with having multiple income streams.

Research by Rollee found that 76% of gig workers have struggled to get approved access to financial products such as a loan or mortgage, despite having a good credit score. It also found that on average, gig workers have had to apply to three different lenders before receiving access to a credit card or loan. This is despite the fact that many of these workers retain sufficient funds to be otherwise approved. Yet as a fast-growing group of British employees, the gig economy could be a significant market that financial institutions could be doing business with.

The Gig Worker and The Everyday Challenge

This inaccessibility to financial services comes down to the traditional and manual operations which financial institutions currently use to verify a person’s source of income. Those on payroll benefit from having what is considered a stable income that is easier for financial institutions to verify and assess. To put it simply, independent workers have more to prove and the current system of verifying an individual’s employment data does not make it easy. What’s more, financial institutions do not have the time to track down multiple streams of data records, and so, this laborious and time-consuming task puts financial providers in a difficult position. Ultimately, banks lose out on valuable business, and gig workers are left to suffer from financial exclusion.

There is a solution to this dilemma which rectifies difficulties for both gig workers and financial institutions - financial institutions require an automated way to comprehensively view all income data from gig worker customers. For those who want to prioritise financial inclusion and accessibility, automation and gaining full visibility of all income records is the future.

Automation Alleviates Pressure

On the road towards financial accessibility, automation can play a transformational role in assisting financial services to streamline current processes, and when fully embraced, both time and money can be saved. What’s more, an untapped market of 4.4 million freelancers in the UK presents a wide business opportunity if financial institutions can analyse data faster without current barriers. To increase business, they must move from manual to automated data verification processes. This requires adopting a fully digitised process to enable secure access to multiple dispersed data sets in real-time.

Automation plays a key role in consolidating and standardising the data to avoid going through painful manual processes. By speeding up the process, business conversions such as selling mortgages can be made quicker with the ability to verify the data much faster than before and access more data from various sources.

The adoption of automated technology platforms also safeguards against issues such as fraud and human error because the visibility of data and data handling can be monitored transparently.  Automation amps up security and sets a new standard for best practice.

To make this a reality, data sets must be compatible which is often a barrier that financial institutions come up against. However, data verification APIs can securely provide compatibility between payroll records and systems. They can help to guarantee the reliability of the data and protect against fraudulent documents. Financial institutions can also benefit from enhanced data security as data is managed in one central, monitored system. This empowers 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.

Not only is this in the interest of the banks who are under pressure to provide inclusive services, but for once, gig workers have the opportunity to be in control of their finances. The ability to share multiple streams of gig worker income data with banks is a game changer and consequently, equitable access to mortgages and loans will become customary.

Final Thoughts

As the number of independent workers continues to rise, it is vital that financial organisations are prepared to verify all their income and employment records within their financial requests and are willing to give new technology a chance in order to fulfil their customer’s needs. Adopting technologies which gives power back to gig workers to control the access of all their employment data instils confidence in gig workers who simply want equal and fair opportunities when using financial services. Needless to say, this benefits customers but banks have everything to gain too.