Over a quarter (28%) of self-employed workers in the UK struggle to access the financial services they require, according to research from open banking platform Tink.
It stated that 27% of self-employed people feel they have been actively discriminated against when trying to access financial services. In addition, 33% feel their employment status has been an obstacle to them getting a mortgage and 31% believe it has hindered their ability to obtain credit.
Tink stated these sentiments can be felt in reality as 15% of self-employed people say they have been rejected while trying to secure a mortgage to purchase a home, twice as many as the national average of 7%.
Furthermore, some self-employed people are struggling to be accepted for core personal banking services, such as current or savings accounts (16% versus 7% national average).
Tink UK & IE banking lead Tasha Chouhan said, “Our research has exposed flaws in the current financial services system, with widespread feeling among many self-employed consumers that they are being denied access to financial services on the basis of their employment status.
“As such, there is a distinct gap between the service those who are self-employed require, and the service they are currently receiving, as many revealed they have struggled to secure personal credit, loans or mortgages at a time when they need them most.”
Tink stated that firms should leverage data-driven technology and open banking technology to enable faster and more accurate credit decisions. With greater access to financial data, firms can better assess the affordability and creditworthiness of people.
It stated that through open banking, financial services could use transaction data in people’s bank accounts to take a holistic approach to gathering insights on income and spending behaviours to inform decisions.
A recent report from Tink found that financial institutions across Europe are “betting big” on open banking payments. One key finding was that three quarters of financial executives (74%) ranked increased payment security and fraud mitigation as key benefits of open banking payments.
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