A bank wanted to provide loans to gig workers who did not qualify under traditional credit scoring. It was losing over 90% of these potential customers to peer-to-peer lenders. The document recommends developing an alternative credit scoring system for gig workers that integrates a fintech solution to collect their digital footprint and mobile usage data. This new system increased the number of loans disbursed by the bank with only a small 2.3% increase in delinquencies. User adoption of the new system reached 78% and it reduced processing times.

1. Gig Economy Workers
Global trends
Context:
A bank wanted to target gig workers who didn’t qualify for loans under
traditional credit scoring systems used to assess the risk of lending to
individuals. Acknowledging that these were potentially healthy clients, the
bank was losing >90% of them to unconventionalcompetitor such as P2P
lenders because of the lack of customer information.
Opportunities:
49% of gig workers are interested doing digital-enabled work. While 47% of gig
workers sell goods and services on platforms such as Carousell, 43% drive
cars, 24% share online content or videos and 11% have set up a start-up.
Recommended solution:
To increase the number of loans disbursed for these underserved individuals,
it is recommended that the bank develop an alternative credit scoring rubric
for gig workers:
• Integrate a FinTech solution into the client’s mobile to collect their digital
footprint.
• The solution tailors a set of smart credit criteria rules based on bank’s
preference and gig worker’s mobile usage pattern on their phones.
Client impact:
• Significant increase of loans disbursed with a delinquency increase of only
2.3%.
• User adoption reached 78% by the end of the trial.
• Reduced need for manual check as processing time is shortened by hours.
• Maintain FTE count for loan processing even when loan application
increase.
Ride-Hailing Drivers
Digital
“Influencers”
Entrepreneurs
From ride-hailing app
drivers to tech
entrepreneurs, there
is a rise in the number
of people working in
the gig economy. 33%
of global workforce is
opting for gig-
economy work.
While the gig economy
offers flexibility and
independence, income
is volatile and “gig”
workers do not enjoy
the same benefits as
employees in large
companies do.
Global motivations for gig economy
Primary Income
Interim Income
(between jobs)
55%
22%
19%
Supplementary
Income
50% of organizations report significant
increase in the use of gig workers over the
last five years
36% of employees in APAC may lose access
to health protections
97% of the gig economy workers are likely to
stay for more than 2 years
Insurance
Increased preference for
easy-to-use, digital
insurance platforms that
offer flexibility and breadth
specific to their on-the-job
risks.
Optimize premium pricing for
each individual by providing
telematics insurance.
Digitally deliver usage-based
insurance tailored to gig
workers’ lifestyle.
PersonalLoans
Offer short-term, flexible
loans by analyzing their
digital footprint.
Simplifying loan application
process across all channels
by leveraging on mobile
applications.
Burgeoningdemand for
alternative forms of credit
scoring for gig workers as
they experience income
volatility.
Financial
Management
Require an on-the-go,
portfolio management
solution that suits their
dynamic schedule and risk
appetite.
Digital nomads require low-
cost and convenient cross-
border transactions
solutions.
Mobile-first and wealth saving
platform using auto portfolio
rebalancing based on
investors’ risk appetite.
Utilize remittance platform to
make cross-border
transactions simple and
affordable.
50%
36%
97%
Varun Mittal
EY Global Emerging Markets
FinTech lead
varun.mittal@sg.ey.com
FinTech Hub
www.ey.com/sg/FinTechHub
Opportunities in the market segmentCustomer segment profile Case Study
How can FIs help?Addressable needs
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