By Ali Hamriti, Co-Founder and CEO at Rollee

Since the pandemic, the way people work and earn money has shifted causing the number of people who identify as ‘independent workers’ to increase by other a third. In fact, 19.2 million Europeans now identify as independent workers, 4.4 million of which are based in the UK, according to research by the University of Hertfordshire. One can be a driver in the morning, a teacher in the afternoon and working on a side project in the evening. As a result, people’s sources of income are increasingly diversifying. 48% of UK gig workers do a side hustle to top up their income from other sources and 52% rely on gig work as their primary source of income.

Diverse incomes have many benefits, such as the flexibility to focus on certain work in case one revenue stream stagnates and the greater financial security that brings. However, with the expectation of greater financial freedom and security, it is disheartening for many independent workers to find themselves up against unequal access to financial services. Over a quarter (28%) of the UK’s self-employed struggle to access the financial services they require, according to new consumer research from Tink. In addition, a third of the self-employed (33%) believe their employment status has been an obstacle to getting a mortgage, and 31% believe it has affected their ability to obtain credit.

Why is it unfair?
Independent workers simply have more to prove and the current system of verifying an individual’s working data does not make it easy.
Financial institutions currently operate manually to verify a worker’s income and employment data. In the case of verifying someone with one regular source of income, this process quickly recognises this record as a stable income. With gig workers earnings coming from different sources from one month to the next, financial institutions are tasked with tracking down different data records which are separated and dispersed from one platform or record to another. This makes it painfully time-consuming for financial institutions to verify an individual’s employment and income data making it difficult to make decisions such as granting mortgages. This slow and risky process means that independent workers face a long journey of delays, and sometimes barriers, when proving their solvency to financial institutions.  Often, financial institutions do not have the time which results in workers being denied access to financial services and business being lost in the process.

What can be done?
To reflect the truth of a gig workers earnings and give them a fairer chance of accessing financial services, the way financial institutions access and analyse data needs to evolve. They need a way of doing deep and complete analysis of a worker’s activity and earnings. This requires adopting a fully digitised process to gain full visibility and transparency of 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. It can help save significant time and money spent on analysing the data to inform financial service decisions. 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.

In addition, by using one central, monitored system to analyse data in, the financial institution can gain greater transparency to guarantee the reliability of the data and protect against fraudulent documents.

The adoption of digital processes can also to help empower 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. Gig platforms can also do more to facilitate inclusivity of financial services by making their workers’ data sharing easier and on a consent basis.

One other thing that needs to change is the way that credit scores are calculated. Today’s calculations are outdated and don’t consider the new work habits and the multiple incomes that independent workers can accumulate.  The Financial Conduct Authority (FCA) must play a role here to help revise the rules that financial institutions have to follow to make credit score calculations a fairer assessment to independent workers.

As the number of independent workers continues to grow, changing the systems and processes will be critical to make it possible to do business with a large market of customers who represent the market of today and the future.