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Ensuring Accurate Underwriting for Gig Workers

Up to 75% of gig payouts can slip under lenders’ radar—leading to inaccurate assumptions about a borrower’s ability to repay and missed lending opportunities.

Increasingly, gig platforms like Uber and Lyft are offering instant payouts at the end of every shift and loading wages onto a company-issued debit card—a system that evades the banking networks and cash flow data many lenders rely on to verify income. This leaves many gig workers shortchanged when it comes to getting a loan or enjoying other financial products and services.
With Argyle, workers connect lenders directly to their employment or payroll accounts, meaning income data is tapped straight from the source no matter how the earnings are distributed.
Below, we break down the problem and take a closer look at what Argyle is doing to fix it.

Most gig income goes overlooked

The gig economy has transformed the way many think about employment, with over a third of the U.S. workforce contracting for platforms like Uber, Lyft, and DoorDash. Now, it’s transforming the way many think about paychecks.
A recent study takes a look into gig workers’ finances, revealing that many have pressing financial needs and expect the platforms they work for to respond with shift-by-shift payouts. In sum:
  • Only 15% of gig workers report having sufficient savings to cover an emergency expense;
  • 29% have relied on predatory payday loans in last year just to get by;
  • 91% expect pay frequencies faster than the typical two-week cycle; and
  • 40% would switch to an employer offering same-day pay.
Stats like these mean that equitable lending practices—and, to equip them, accurate underwriting models—are more important than ever to support independent contractors living gig to gig.

The problem? 75% of gig payouts are skipping workers’ accounts entirely and being cashed out to debit cards—meaning lenders miss 75% of the picture when they use banking data to verify income. That’s a big piece of the pie.

So, how can lenders accommodate instant card payouts and get a complete picture of gig-based earnings? That’s where Argyle’s real-time payroll data comes in.

How Argyle is closing the gap

Argyle’s income data comes from a worker’s employment platform or payroll provider—not from their bank account—so lenders get total visibility into all earnings regardless of how they’re paid out. 
What’s more, our data is updated in real time, with up-to-the-minute webhook notifications alerting lenders of any change to a user’s employment status or direct deposit information. That coverage spans over 140 endpoints, from layoffs and pay raises to driving histories and performance ratings.

New use cases, infinite product expansion

Argyle’s comprehensive data not only provides a more holistic view of gig-based income, it solves for a number of financial scenarios unique to the gig economy—like earning fractional income from multiple sources at once—allowing lenders to discover new use cases and develop innovative products to engage this growing market.
Take our partners at Moves Financial, a fintech startup creating services specifically for gig workers. Moves uses three of Argyle’s products to elevate its customers’ finances:
  • Our automated verification of income and employment allows Moves to view workers’ earnings across multiple gig platforms, so its team can make faster, better lending decisions.
  • Our direct deposit switching enables Moves to open flexible spending accounts on workers’ behalf, making it easy for workers to redirect paychecks to a new primary account.
  • Finally, our paycheck-linked lending model allows Moves’ customers to automatically allocate portions of incoming gig wages to repaying their loans and cash advances.
With Argyle’s solutions, Moves isn’t just keeping up with the gig economy, they’re building on it.

Ready to round out your data set?

Reach out to the Argyle team, and learn more about how our real-time employment data can launch your lending into new markets. Better yet, take our sandbox solutions out for a free trial.

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