Tink: UK’s self-employed ‘being denied access’ to financial services
One-third of self-employed people in the UK are being denied access to financial services, such as a mortgage, on the basis of their employment status, according to new research.
European Open Banking platform Tink has found that 28% of the UK’s self-employed struggle to access the financial services they require, while 27% feel they have been “actively discriminated against” while trying to access financial services.
Tink surveyed 2,000 UK adults, including a boosted survey to include 250 self-employed adults.
The findings revealed that 33% of self-employed people 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.
Tasha Chouhan, UK and 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.”
According to Tink, twice as many self-employed people struggle to access the financial services they need versus the national average, with 15% of those who are self-employed having been rejected while trying to secure a mortgage, compared to the national average of just 7%.
When it comes to being accepted for core personal banking services, such as current or savings accounts, that rises to 16% of self-employed people versus the 7% national average.
Chouhan called on financial services providers to embrace the use of Open Banking technology to enable faster and more accurate credit decisions in real time.
“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,” she added.
Tom Pope, VP payments and platforms at Tink, recently told Open Banking Expo about the ‘spectrum’ of use cases Open Banking-enabled payments can solve.