• Ali Hamriti, CEO and Co-Founder at Rollee


• 08.03.2023 11:00 am
#financialServices

With ongoing economic uncertainty and the cost-of-living crisis, financial pressures have been amplified for many people, 5.2 million of which have since taken on extra jobs. 

Gig workers, or independent contractors, are a rapidly growing population who contribute a substantial £20bn to the UK economy. By having several jobs on the roster, these workers can achieve an increased level of financial security. With 2, 3 or even 4 ventures in place, there is an ample safety net for these workers to fall back on. 

Despite the perks that accompany gig working, most of these workers experience difficulties when accessing financial services such as mortgages and 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.

What’s more, 57% of 1000 gig workers surveyed have had to apply to three or more different lenders before receiving access to a credit card or loan. 52% of gig workers have missed out on the purchase of a home due to being declined by a bank or building society, even though they have the affordability to be approved. 

This comes down to outdated credit scoring systems which are unable to factor in modern work practices such as having multiple records of income and employment data. As a consequence, it is independent workers who pay the price for these unfit processes. 

A Change for Good

It is important that gig workers can access the services they need and receive a fair assessment of their finances. As this population of workers grows, it is in the best interest of financial providers to navigate ways to gain full visibility of their employment data. 

Current manual verification operations used by financial institutions are time-consuming, clunky and inefficient. As they are unable to efficiently track down different salary data records which are separated and dispersed in various places, independent workers are unfairly left to prove 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.

However, financial institutions are aware that new systems are needed and there is potential for change. 

The way forward is to adopt a fully digitised, automated process so that providers can gain full visibility and transparency of multiple dispersed data sets in real-time. Data automation plays a key role in consolidating and standardising 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.

Embracing the future of alternative data

The easiest way moving forward is to implement a single and central monitored system to analyse employee data in. This approach ensures that greater transparency is achievable whilst eliminating the risk of fraudulent activity or the tampering of data. 

Another bonus that comes with adopting a digitised system is the shift of power in favour of independent workers. For the first time, independent workers are empowered as the owners of their various streams of employment data. Workers can decide how they would like to grant permissions to access their financial data, all without completely parting with the data itself.

New ways of working are not currently considered within credit scoring however, with support from The Financial Conduct Authority (FCA), the current rules that financial institutions are required to follow should be revised to make credit score calculations a fairer assessment for independent workers.

Thinking Ahead... 

Independent workers are representative of the current ways more and more of us choose to value and practise flexible working. If financial institutions would like to remain competitive, it is essential that systems are upgraded to suit a new, forward-thinking and ever-growing market of workers.