Quarter of self employed struggle to access financial services

New research from open banking platform, Tink, reveals that over a quarter (28%) of the UK’s self-employed struggle to access the financial services they require, leading many to believe the current system works against them due to their employment status.

According to the survey of consumers, a stark 27% of self-employed people feel they have been actively discriminated against whilst trying to access financial services. In addition, a third of the self-employed (33%) believe their employment status has been an obstacle to them getting a mortgage, and a further 31% believe it has hampered their ability to obtain credit.

These sentiments are borne out in reality as more than one in six (15%) 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 just 7%. Meanwhile, some self-employed people are even struggling to be accepted for core personal banking services such as current or savings accounts (16% vs 7% national average).

With sole traders contributing an estimated £303 billion to the UK economy, Tink says that these findings lay bare the need for tailored, data-driven financial support for the self-employed. They highlight an opportunity for financial services providers to give control back to consumers by enabling them to use their own real-time data to access a broad range of products and services.

Tasha Chouhan, UK & IE Banking Lead at Tink, 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.”

“Data-driven technology is changing the lending process, and financial services providers should embrace the use of open banking technology to enable faster and more accurate credit decisions in real-time which work for everyone – including the self-employed. Greater access to financial data allows lenders to make better decisions about affordability and creditworthiness, based on up-to-date income and spending information, rather than credit scores or antiquated risk decisioning.”