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FIs Must React as 70% UK Gig Workers Struggle to Access Financial Products; Urges Rollee

Around a quarter of financial institutions struggle to access all the income and employment data when accessing UK gig worker applications; according to Rollee, the fintech start-up providing secure and consented access to income data. 

New Rollee research has revealed how difficult the current banking and finance landscape is for UK gig workers to traverse. In fact, 70 per cent of all UK gig workers struggle to get approved access to financial products. Comparing these insights to research by Rollee in 2022, this figure has only improved by six per cent. With such a way to go, this figure will not be comforting.

Thirty-eight per cent of UK gig workers are not confident that their bank has a complete picture of their income streams when they are applying for a financial service.

The findings come from Rollee’s newly released Gig Economy Equality Gap report, which explores the current state of gig workers’ financial exclusion, the challenges banks experience undertaking credit checks, and a subsequent data disconnect.

Sixty-six per cent of the 1,001 gig workers surveyed for the research revealed they have been denied a loan since being a gig worker, despite knowing they have a good credit score. Meanwhile, 34 per cent of gig workers have lost out on a new home due to being declined by a bank, building society, or a renting agency, despite knowing they have affordability.

After submitting an application, 68 per cent of gig workers felt that the financial institution didn’t take the time to accurately consider all their income and employment data.

Many gig workers are finding it difficult to find out why their applications are unsuccessful too. Forty-two per cent said when they have been denied a financial service, such as a loan or mortgage, the financial institution has not provided a reason for the unsuccessful application.

Can banks embrace the ‘final frontier’ of open finance?

Overall, a hugely significant 80 per cent of gig workers believe they don’t have the same access to financial services as traditional full-time workers, but why is this?

Of 503 individuals in financial institutions surveyed, 73 per cent explained their current risk assessment processes are not able to see a complete picture of a gig worker’s payments, income, and employment records. While 34 per cent said they are more likely to approve an application from a PAYE worker than a gig worker because they have greater transparency of their income and employment data.

Ali Hamriti, CEO and co-founder at Rollee, discusses UK gig workers
Ali Hamriti, CEO and co-founder at Rollee

Ali Hamriti, CEO and co-founder at Rollee, discussed the difficulty for UK gig workers: “This research reveals that financial institutions are struggling to grant gig workers access to financial products because of a data disconnect in credit checks. This is having critical repercussions on the lives of many self-employed workers, causing them to face high levels of financial exclusion and being denied financial products despite having the necessary levels of affordability.

“To avoid excluding a growing market of gig workers, bridging the gap caused by this data disconnect is vital. Financial institutions must find solutions to access a broader range of data, including verifiable data points about a worker’s income, employment status and activity.

“Having this kind of holistic view will ensure that credit assessments are not just based on financial transactions, but also account for gig workers’ ability to repay. This is the final frontier of open finance.”

Exclusion by financial institutions is simply one of the many challenges gig workers are facing. The data revealed that over the past 12 months, 86 per cent of gig workers have taken on at least two additional jobs in order to manage financially during the cost-of-living crisis.

Author

  • Tom joined The Fintech Times in 2022 as part of the operations team; later joining the editorial team as a journalist.

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