There are around 4.4 million people in the UK who work for gig economy platforms at least once a week. The ongoing cost of living crisis has exacerbated financial pressures for many more people, 5.2m of which have taken on extra jobs. This rapidly growing population contribute a substantial £20bn to the UK economy.
Having several jobs on the roster comes with its benefits. The level of financial security experienced by independent workers is increased because the option to fall back on a second or third venture is a tenable option. Post-COVID, flexible working is high on the list of employee wish lists with a reported 76% of employees wanting flexible working hours. For gig workers, the flexibility to manage one’s own time and pursue the line of work which financially or emotionally fulfills them at any given time is yet another advantage.
In spite of the perks that accompany gig working, many independent workers find themselves experiencing unequal access to financial services such as mortgages or loans.
Rollee’s Hidden Cost of Gig Worker Living report found 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.
57% of 1000 gig workers surveyed have had to apply to three different lenders before receiving access to a credit card or loan. What’s more, despite knowing they have affordability, 52% of gig workers have missed out on the purchase of a home due to being declined by a bank or building society.
Unfortunately, current credit scoring systems are not set up to consider modern work practices such as having multiple records of income and employment data and gig workers bear the cost of this through no fault of their own.
Transformation for today and tomorrow
With consideration of the growing population of independent workers, it is important that financial providers navigate ways to gain full visibility of their employment data. A thorough view of this data ensures that gig workers can receive a fair assessment of their finances whilst preventing discrepancies in their access to financial services.
The fact of the matter is that the manual verification operations currently used by financial institutions are time consuming. They are painfully clunky, with the inability to efficiently track down different salary data records which are separated and dispersed in various places. Independent workers also face a long journey of delays, and sometimes barriers, when proving their solvency to financial institutions. In other cases, financial institutions do not have the time to manually track down all sets of data, which results in gig workers being denied access to financial services and valuable business being lost in the process.
This outdated system doesn’t need to be the reality for gig workers. Financial institutions are aware that a new approach is needed. Integrating an automated way of doing deep and thorough analysis of a worker’s activity and earnings is the answer. This fully digitized process will allow for full visibility and transparency of multiple dispersed data sets in real-time.
Data automation plays a key role in consolidating and standardizing the data so that time-consuming manual processes can be left in the past. When embraced, automation saves time, money and helps to speed-up the decision-making process for financial providers.
The way forward
The bonus of implementing a single and central monitored system to analyze employee data in, is that a greater level of transparency and protection is achievable. The risk of fraudulent activity is far removed from the picture because the reliability of data is verifiable.
Another bonus that comes with adopting a digitized system is the shift of power in favor of independent workers. Workers can decide how they would like to grant permissions to access their financial data, all without completely parting with the data itself. For the first time, independent workers are empowered as the owners of their various streams of employment data.
There are also opportunities for credit scores to be calculated with productivity and inclusivity in mind. Unfortunately, new work habits are not considered within current calculations. However, with help from The Financial Conduct Authority (FCA), the current rules that financial institutions are required to follow must be revised to make credit score calculations a fairer assessment for independent workers.
The Foreseeable Future
If financial institutions want to remain competitive, they must begin to consider independent workers within their services. This growing market of workers are representative of current times, and it is the role of financial providers to upgrade their systems to suit a modern market of employees.
