GlobalData: Fintech companies could boost gig economy with AI

GlobalData has revealed that the number of gig workers has increased in the world's largest economies, prompting lender curiosity about expanding their access to credit. Gig workers who previously struggled in the lending ecosystem due to their temporary, freelance jobs wanting steady pay cheques could now utilise artificial intelligence (AI) to convert them into creditworthy borrowers, by using alternative data. Kiran Raj, Principal Disruptive Tech Analyst at GlobalData, noted that traditional credit scoring models, such as FICO, are inherently flawed in accessing thin credit files due to their assessment of only a handful of standard data variables. Raj acknowledged that this leads to lenders reeling under pressure to make more inclusive credit decisions in real time. "This is where fintech start-ups have come into action with their AI credit scoring models almost instantly interpreting alternative data like historical payments, digital footprint and behavioural economics," Raj said.