Closing the gig economy equality gap with comprehensive financial data integration

by Ali Hamriti, Rollee Co-Founder and CEO

From food delivery drivers to freelance graphic designers, the UK’s gig workers provide a diverse range of services to society and contribute £20bn to the UK economy. Despite their contribution to the UK economy, gig workers struggle to access financial services to support themselves. This is because ongoing data disconnections prevent financial services companies from accessing necessary income and employment data of gig workers, resulting in economic exclusion. Addressing these challenges in credit reporting is critical to achieving financial inclusion and supporting the development of a modern workforce.

Unzipping data disconnection

Rollee’s research reveals that financial institutions struggle to give gig workers access to financial products due to data disconnections in credit reporting. Financial institutions typically don’t have a complete picture of a gig worker’s income or employment history. Therefore, we are more likely to approve applications from PAE employees. Just over a third (34%) of the 503 financial institution employees surveyed were more likely to approve an application from a PAYE worker than a gig worker due to greater transparency of income and employment data answered that it was high.

Open banking shows the potential to facilitate the secure sharing of financial data. However, the drawback is that you are limited to bank-based payment data. Financial institutions need seamless access to diverse data sources in real time through automated connections to various income and employment platforms.

When financial institutions attempt to leverage and integrate data from freelance platforms and HR software via internal public APIs, they often encounter additional bottlenecks and roadblocks. Similarly, engaging in discussions with platforms about private API access can result in rejection, and integrating multiple platforms creates scalability challenges. This approach requires significant resource investment from backend, data, and DevOps teams, hindering data-driven decision-making and growth. In fact, its effectiveness is further constrained by the complexity of the technology involved.

New implications for the gig economy

Lack of access to data is negatively impacting gig workers, especially financial services such as mortgages and loans. Recent insights from our Gig Economy Equality Gap Report show that 70% of gig workers struggle to gain approval to access financial services, and a third of gig workers in the UK work for banks, construction associations , or losing a new home due to rejection from a housing finance institution. Leave it to an agent even though you know it’s affordable.

66% of gig workers surveyed said they had been denied a loan, and 42% said that when they are denied financial services such as loans or mortgages, financial institutions do not provide an explanation as to why their application was unsuccessful. I answered that there was no. The effect of this example of financial exclusion is that it not only causes financial stress, but also causes the worker to apply for three credit cards or loans before he is accepted. Some consider traditional employment routes despite the disadvantages they face. That’s why we need to address ongoing disparities.

Integration is the way forward

Financial institutions must take a holistic view through a broader range of data, including an overview of workers’ income, employment status, and activities. The benefit of this overview is that it provides data to prove whether gig workers can afford it and have the ability to repay. This is a fundamental part of the integration process.

Financial institutions should also focus on expanding their integration efforts across markets with the help of external API infrastructure. That said, integration is not the only important aspect going forward. Another important factor is automation. This provides faster and more efficient results and acts as a gateway for easy, reliable and quick access to income and employment data in real time. The focus is shifting from time-consuming processes handled by in-house technology teams to empowering gig workers to manage their own data while providing tools to share financial ownership. This is the final frontier of open finance.

Fill data gaps

Recognizing the social and economic contributions of gig workers through data transparency is long overdue. This transparency allows financial institutions to address the inequalities faced by gig workers and level up access to financial services. It also helps expand offers to entirely new audiences that have been previously ignored due to lack of transparent data and inability to recover and verify correct data. Investing in a robust data infrastructure to foster transparency is key to recognizing, supporting and addressing the financial inclusion needs of a dynamic and valuable gig sector.