Banks embrace the gig economy

I just got a report from PwC and my heart sank. The headline is:

Financial institutions to significantly increase use of gig economy workers to upskill workforce

PwC report suggests up to a fifth of future workforces in financial services could be gig employees

The detail is:

• Importing the digital and specialist skill sets of gig workers is critical to driving digitization and upskilling within financial services
• Gig-economy talent makes up just 5% of current financial services businesses workforce
• PwC predicts that in the next five years gig workers will perform 15% to 20% of the work of a typical institution
• However, there are a number of hurdles to overcome with firms worried about confidentiality, lack of knowledge and regulatory risk of gig economy workers

22 February 2021 – More than half (52%) of financial institutions say they expect to have more gig-based employees over the next three to five years, according to PwC's report, “Productivity 2021 and beyond: Upskilling the workforce of the future to create a competitive advantage in financial services.”

The upskilling of the workforce is a key element to improving productivity within financial services. This includes better understanding of the workforce, embracing the platform economy and gig workers and making sure employees are equipped with the right digital tools, specialist knowledge and soft skills to navigate in the new normal of the business world. Firms need new capabilities – both in-house and through outsourcing – as technology solutions increasingly involve collaboration with third parties.

Despite increasingly available on-demand talent, most institutions still rely primarily on full-time and part-time employees. Among respondents, contractors comprise just 9% of the workforce, and gig-economy talent makes up just 5%.

John Garvey, PwC’s Global Financial Services Leader, PwC US, comments: “Leaders in the industry are looking seriously at their workforces to evaluate which roles need to be performed by permanent employees and which can be performed by gig-economy workers, contractors or even crowd-sourced on a case-by-case basis. COVID-19 and remote working have opened the door to accessing talent outside of a firm’s physical location, including outside of the country. What we are seeing now is a talent marketplace for gig workers in financial services, competing to take advantage of their specialist skill set and boost productivity within their businesses.”

Nicole Wakefield, PwC's Global Financial Services Advisory Leader, PwC Singapore, adds, "Gig economy workers also add value by immediately bringing the digital skills needed by financial services firms to improve functions such as customer experience and improving institutional resilience, while the full-time workforce is being upskilled."

However, there are challenges for financial services businesses taking on gig economy working, which will require overcoming several obstacles. The survey shows that the most common issue cited by respondents include confidentiality concerns (44%), a lack of knowledge (43%), regulatory risk (42%) and overall risk avoidance (37%).

Why did my heart sink?

It sank for a number of reasons.

First and foremost, this has nothing to do with embracing the platform economy. It’s much more about saving costs.

Second, the way in which this is phrased is not the gig economy, but using more contractors. There’s a huge difference between hiring someone who can code in Python and having a guy on a bike delivering Uber Eats. The latter is the gig economy; the former are called freelancers.

Third, if banks do significantly increase gig economy workers – which by its nature implies unskilled people – it’s all about zero hour contracts, cheap labour, abusing human rights and increasing inequality. Just as with Uber and others, the law is now seeing their gig economy people as workers with workers rights, not just units in the clockwork of the corporate machine.

I could go on, and rarely publish press releases, but this one seriously annoyed me.

Thanks PwC.