19.2 million Europeans now identify as independent workers, 4.4 million of which are based in the UK, according to research by University of Hertfordshire. In today’s digital world of online work and with the rise of the creator economy and gig platforms, one can be a driver in the morning, a teacher in the afternoon and working on a side project in the evening. With so many opportunities to earn a living, people’s source of income is increasingly diversifying. 48% of UK gig workers do it as a side hustle to top up their income from other sources and 52% rely on gig work as their primary source of income. By Ali Hamriti (pictured) , Co-Founder and CEO at Rollee

There are so many benefits to having a diverse income 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. 

How the system works

With gig workers earnings coming from different sources from one month to the next, financial institutions consider this irregular income a risk when deciding to grant a mortgage or a loan. Those on payroll benefit from having what is considered a stable income that is easier for financial institutions to verify and assess. To put it simply, independent workers 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. With multiple income streams, this data is separated and dispersed from one platform or paper 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.

Creating fair access to financial services for all

Self-employed gig workers need a fair chance to be able to prove their solvency to financial institutions. One thing that needs to change is the way that credit scores are calculated. Today’s calculations are outdated and don’t take into account 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. 

On a similar note, financial institutions need to expand the way they analyse data. They need a way of doing deep and complete analysis of a worker’s activity and earnings to reflect the truth. This requires adopting a fully digitised process to gain full visibility and transparency of multiple dispersed data sets in real-time whilst eliminating the bottlenecks of manual processes. 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.

An automated process also provides greater data security as it provides one central, monitored system to analyse data in. It provides greater transparency to guarantee the reliability of the data and protect against fraudulent documents. The adoption of technology platforms can also 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.


Adopting fairer systems 

With clear visibility of multiple records of income and employment data, financial institutions can be empowered to make informed decisions based on data they can trust to deliver services. As the number of independent workers continues to grow, adopting digital processes will be the gateway to doing business with a large market of customers which represent the customers of today and the future.