The promise of employment data in the gig economy
- Financial institutions are failing a third of the workers: the self-employed. That number rises by 2027, when gig workers are projected to make up half of the labor force.
- Download our latest whitepaper laying the groundwork for what FIs are missing – and all the ways leveraging alternative data can lead the way to a more inclusive financial system.
Nearly half (49%) of 1099 workers reported being rejected for financial products they could afford. Why?
More people are self-employed today than they have been in 20 years, with the trend expected to continue. What’s more, independent workers are pulling income from multiple, often diverse, gigs, largely due to rapid technological advancements and lightning bolt global events.
Yet, our legacy financial infrastructures cater to traditional W2 workers with single, full-time jobs. The industry inadvertently marginalizes self-employed, 1099 workers, who struggle to access financial products like credit cards and loans.
Financial institutions typically rely on traditional data like credit scores to finance loan products. We believe employment data is a much better indicator of a worker’s ability to pay back loans.
And workers do too. In fact, 70% of gig workers say that their employment records are better indications of their financial health than their credit scores.
Using data aggregation technologies, lenders can incorporate employment data into their underwriting models to better assess a borrower’s ability to meet a payment schedule. Lenders can make better informed lending decisions that could increase borrowers’ access to loans and other financial products.
In our latest whitepaper, we break down what the lending space needs to know:
- The loss at hand, and the loss to come, from overlooking the 1099 worker
- The needs and wants of the modern gig worker
- Opportunities and solutions presented by data democratization
- How financial services can brace for the growing gig economy with the help of employment data