Financial Health for

the Future of Work

January 2019

PayPal Inc.
Center for Social Sector Leadership, University of California, Berkeley P. 1
Centre for Public Policy, Indian Institute of Management in Bangalore
Contents
Executive Summary 4
Introduction 12
The Future of Work: Hype vs. Reality 15
Automation, Machine Learning, Artificial Intelligence 15
Platform Economy 18
Socio-Demographic Changes 22
Entrepreneurship 27
The Impact of the Future of Work on Retail Financial Services 29
Payments: Inflows and Outflows 29
Savings: Short- and Long- Term 32
Credit 39
Financial Management 41
Opportunities to Build Financial Health for the Future 43
Ecosystem 43
Universal Financial Health 43
Reestablish Trust 46
Institutions 49
People over Products 49
Get the Full Story 51
Products 54

Flexibility 54
Intelligence 55
Conclusion 58
Appendices 60
References 76
Executive Summary
The future of work debate has sparked a conversation about the need to fundamentally
rethink “social contracts” in markets around the world. It has also stimulated debate about
important reforms in areas such as labor retraining, health care benefits, and pension mar-
kets. It stands to reason that just as these markets need to be shifted in light of changes
in the labor market, so too does the retail financial services marketplace.

Retail financial services were designed largely for a world where individuals had a handful
of fixed salaried jobs over the course of their lives. There is an increasing consensus that
this will no longer be the case going forward. The traditional nine-to-five job is likely to be
less common going forward, as well as the idea of a single job for life. This change should
stimulate a sector-wide discussion about essential reforms and innovations that need to
occur in financial services. This research paper is the first to explore the implications of the
future of work on financial services.

Reforms to financial services ought to prioritize the goal of building financial health and
resilience for individuals, families, businesses, and communities. There are 1.7 billion peo-
ple in the world without access to formal financial services, but there are billions more for
whom the traditional financial system simply does not work.1 Building up these individuals’
ability to pay and be paid, manage expenses, save for emergencies, access credit, and plan
for their future is where financial services reforms ought to focus. Moreover, incorporating
changes in the way in which people earn money into this calculus will only make for better
financial intermediation and better outcomes for people going forward.

Three original sources of information were utilized in the preparation of this report:

1. a survey of 8,000 working age people from 8 different markets;

2. over 100 interviews with experts on future of work and/or financial services; and

3. proprietary PayPal data.

P. 4
The survey was fielded in Brazil, Canada, China, France, Germany, India, the United King-
dom, and the United States. A broad spectrum of experts from over 25 different countries
were involved in the interviews, including government officials, corporate leaders, labor
economists, international lawyers, startup founders, technology investors, non-profit
CEOs, and academic historians among many others.

There were important geographic divergences in the findings of our research and in future
reports we will focus on unique insights from specific markets. However, below are some
of the key findings that cut across markets and reflect global trends:

1. Automation
Automation, machine learning, and artificial intelligence are likely to cause job churn and
increase the need for retraining and upskilling throughout people’s working lives. There
will be an increased need for short-term savings and credit solutions that allow people to
bridge income gaps while making these transitions.
• Workers in jobs that are at a high risk of automation (classification according to data
from the OECD2) are underprepared for their financial needs in the future.

• Over 75% of workers in jobs that are

at a high risk of automation believe that
over the next 5 years their incomes will
be more predictable or there will be no
change in predictability compared to
today.

• Only 38% of workers in jobs that are

at a high risk of automation report that
they have savings to cover 6 or more
months of expenses if they lost their
primary source of income.
• Workers in jobs that are at a high risk
of automation are 13% more likely than
Only 38% of workers in jobs that are at a
high risk of automation report that they
have savings to cover 6 or more months
of expenses if they lost their primary
source of income.

P. 5
 those at low risk of automation to have
paid a bill late and incurred additional
fees over the last 12 months.
• 50% of respondents borrow from
friends/family or a financial institution
when they don’t have enough income for
their expenses. With career breaks and
income gaps potentially becoming more
prevalent, there is going to be a need to
reimagine credit and savings.

2. Online Platforms
Online platforms are growing in importance, increasing the number and type of working
relationships that people will have over the course of their lives. Independent contractors
have always been a part of the global economy, and this segment continues to face
financial challenges because of unsteady income. Platforms are enabling independent
contractors to improve their financial situation. Nevertheless, there are unique financial
challenges that are faced by workers on platforms. Financial services need to adjust to
enable payments, credit scoring, underwriting, and consumption smoothing based upon
multiple streams of variable income.
• Only 28% of independent contractor
Only 28% of independent contractor re-
respondents to our survey said they spondents to our survey said they make a
make a consistent income each consistent income each month, compared
month, compared to 72% of all survey to 72% of all survey respondents.
respondents.

• Only 65% of independent contractors

reported that they can cover their
monthly expenses with their current
income, lower than any demographic
group we studied.

• The total payment volume of platform

companies that use PayPal grew on
average 47% year-over-year between
2014 and 2018.3

• Nearly 75% of respondents working

in the online platform economy said
they could cover more than 3 months of
expenses if they lost their main source
of income, higher than almost any other
group we studied.
paid a bill late and incurred fees over the
past 12 months, compared to only 38%
of people who do not participate in the
online platform economy.

• 51% of workers in the online platform

economy in our survey dataset have

P. 6
 • 63% of workers in the online platform
economy in our survey dataset said they
prefer to receive income from work more
frequently.
• Real-time payments to platform
economy workers through PayPal’s
recently-acquired Hyperwallet platform
have increased by more than 200% year-
over-year.

3. Socio-demographic shifts
Socio-demographic shifts in the labor market, such as age, gender and location are driving
demand for work flexibility and will require innovations in financial management to truly
meet people’s financial needs.
• 34% of millennial (ages 21-38)
respondents said that they have multiple
jobs, compared to 25% of their Gen X
(ages 38-50) counterparts.

• Millennials are 16% more likely to

prefer to receive their income through
digital payment apps than their Gen X
counterparts.

• Around 75% of millennial respondents

said that they believed over the next
5 years more than 50% of their jobs
would be impacted by new or changing
technology.

• 52% of women respondents reported

that they would be very stressed if
they lost their main source of income,
significantly higher than their male
counterparts.

• Only 64% of female respondents

reported feeling confident about their 34% of millennial (ages 21-38)
ability to reach their financial goals, respondents said that they have multiple
jobs, compared to 25% of Gen X (ages 38-
compared to 71% of male respondents. 50) people.

• Only 14% of rural respondents said

that they felt very confident they would
be able to retire at their desired age,
compared to 24% of urban dwellers and
21% of all respondents.

P. 7
4. Entrepreneurship
Entrepreneurship may become a viable path for income generation for more people in
the future. For many entrepreneurs there remain great challenges in financial services
including payments as well as access to credit to help enterprises start up and smooth out
income fluctuations.
• Only 46% of small business owners re-
ported making consistent income each
month, compared to 72% of all survey
respondents.

• 55% of small business owners reported

paying a bill late over the last 12 months,
a higher percentage than any other de-
mographic group we studied.

• 77% of small business owners said they

would like to receive their income more
frequently, compared to only 49% of
overall respondents. 55% of small business owners reported
paying a bill late over the last 12 months, a
higher percentage than any other demo-
graphic group we studied.

Despite the fundamental challenges that the future of work will raise for financial services,
this is also an important opportunity to reimagine financial tools and solutions. This paper
highlights opportunities to innovate and reform financials services in light of changes that
will be brought by the future of work in a manner that will lead to increased financial
health for individuals and families across the world. Our research revealed that there
are both specific financial services challenges as well as structural problems that must
be resolved. Thus, we advocate for a top-to-bottom approach of wholesale reform of
financial services. These reforms must come at the highest levels of the financial services
ecosystem, pervade individual institutions, and down to particular products. It is only
through this holistic transformation that financial services can effectively help people and
communities manage their financial lives in the future.

P. 8
1. Ecosystem
• Universal Financial Health: The future
of work presents an important opportu-
nity for financial sector deepening, in par-
ticular for emerging markets. Hundreds
of millions will be brought into the formal
financial system over the next few years
as individuals secure work and transact
through technology-based platforms. New
challenges related to inequality in financial
services should become the paramount
concern. The public and private sector
must align around the goal of ensuring that
every worker is able to lead a financially
healthy life in the future.

• Reestablish Trust: Financial services

currently suffer from a major trust deficit.
As work and financial services continue
to digitize, it will only be more important
and critical to build trust into the heart
of the ecosystem. Digitization presents
an opportunity for unprecedented trans-
parency; and the ecosystem must lean in
to provide that transparency. Technology
also increases exposure and vulnerabilities
related to data privacy, security, and digni-
ty. The ecosystem must respond to these
vulnerabilities head on and work with the
public sector to protect users. Moreover,
providers must be aware of biases that
could be embedded and prebuilt into fi-
nancial technologies. Ethical frameworks
and codes of conduct must be designed to
mitigate risks. Again, the public and private
sector must work in collaboration in order
to reestablish trust in the financial services
ecosystem.
2. Institutions
• People over Products: The future of work
will create a far more heterogenous set of
customers for financial services providers
going forward. Institutions must seek to
understand the everyday real-world needs
and problems that people are dealing with.
Solutions must be developed for finan-
cial needs on a personal level rather than
simply trying to push people into existing
product sets or siloed categories. Focusing
on people can also lead to the develop-
ment of new products that meet burgeon-
ing needs in better ways.
• Get the Full Story: Financial services
providers need to develop a holistic un-
derstanding of customers’ financial lives in
order to develop more effective solutions.
Workers in the future are going to have a

P. 9
complex set of financial inflows and out-
flows. Open data within the financial ser-
vices ecosystem is an important first step
towards better understanding customers.
Integrating with data from employers,
governments, and billers would expand
the knowledge base of financial services
institutions. Moreover, enabling people to
understand the financial value of all their
talents and assets is currently an untapped
opportunity. The best way to enable inno-
vation, empower the customer, and en-
hance economic opportunity is through
interoperability and portability between fi-
nancial providers so that a comprehensive
picture of the customer can be built, and
customers can choose and customize the
best product solutions for their needs.

3. Products
• Flexibility: The nature of work going for-
ward is going to be more flexible, so too
will financial services need to flex to match
the levels and timings of inflows and out-
flows of income of the modern worker. The
needs of workers going forward will be more
proximate in time. People will need more
tailored tools such as micro-payments,
micro-savings, micro-credit, micro-invest-
ments, and micro-insurance, which can
help to overcome the many short-term
uncertainties that are likely to become
increasingly common in the future. En-
abling individuals to access payments in People will need more tailored tools such
as micro-payments, micro-savings, micro-
real-time, save small amounts from their credit, micro-investments, and micro-
paycheck, leverage future earnings for insurance
credit, and secure insurance to appropri-
ately manage risks will greatly enable their
significant moments in people’s life cycle.
future prosperity. Moreover, breaking lon-
Simplified and integrated dashboards can
ger-term savings and credit products into
help provide transparency and choice.
bite-sized pieces makes it more likely that
Data should be leveraged to nudge people
individuals will engage with longer-term
to positive long-term financial decisions
products in the future.
and suggest the right product for the
• Intelligence: The complexity of a particular need at the right time. Enhanced
financial life is going to increase due to intelligence can help to provision the kind
the multitude of jobs and increased life of flexibility and structure that will be
expectancy. Future financial products desired in the future, alongside the kind of
need to understand variability in income stability that is needed.
streams, changes in expense flows, and

P. 10
Reforming financial services is not going to
fully resolve the problems associated with
the future of work. There are structural
challenges that will require fundamental
reforms made to other sectors like gov-
ernment benefits, health care, and labor
relations. Financial providers can help to
provide insights about the financial lives
of their customers, which might help to
inform some of the changes needed in
these adjacent sectors. Moreover, financial
services providers ought to be promoting
some of these reforms as they could help
to create more stability in the lives of their
customers. If these societal reforms falter,
however, it only magnifies the importance
of reimagining financial services to empow-
er individuals to be able to manage some of
the changes and uncertainties that will be
presented by the future of work.
P. 11
Introduction
The future of work debate has sparked a
set of important conversations about how
to change fundamental institutions like
health care, pensions, and labor organiza-
tion. Retail financial services must similarly
adapt to changes in the way in which peo-
ple will be earning an income in the future.
The debate around the future of work is
largely taking place in industrial markets,
in particular the US and Europe. However,
the debate also has incredibly important
implications for emerging markets.

There are several forces at work that seem

to be driving the discussion around the
future of work. The first, and foremost,
driving force is technology – whether it is
automation that causes job churn and dis-
placement, or digital platforms that enable
work to be broken up into small individu-
al tasks and distributed to a nearly limit-
less supply of workers. Socio-demographic
changes related to age, gender, family, and
urbanization also seem to be driving the
trend of increased demand for flexibility in
work. Moreover, the uncertainty created
by the future of work seem to be propelling
a new wave of entrepreneurs attempting
to take more control of their financial fu-
ture. All of these changes seem to be lead-
ing to a labor market in which work will be
increasingly uncertain and variable in the
future.
The trends in the future of work are like-
ly to cause very different outcomes in in-
dustrial and emerging markets. But, in the
longer term, the future of work may drive
convergence between emerging and de-
veloped economies in terms of the struc-
ture of their labor markets. Flexibility, un-
certainty, and variability have long been a
feature of work arrangements in emerging
markets. Technology, socio-demographic,
and economic shifts may yield short-term
increases in stability in emerging markets
by bringing more workers into the for-
mal economy and providing more income
earning opportunities. Meanwhile, indus-
trial markets in the short-term are brac-
ing for volatility and job churn as a result
of these similar changes. This convergence
may already be starting to take place. Dar-
yl Collins, CEO of Bankable Frontier As-
sociates (BFA) and author of Portfolios of
the Poor argued that the multitude of in-
come sources high volatility of income she
is currently seeing in the US, mirrors what

P. 12
she has seen in non-agricultural popula-
tions in Kenya and many other emerging
economies where informal labor is preva-
lent.4 As technology continues to evolve
in emerging markets, however, the costs of
adding a worker may start to outpace the
cost of adding a machine. Therefore, in the
There have traditionally been three pillars of the safety net that help people weather the
type of labor and income shocks that are being predicted in discussions around the future
of work:
The future of work debate has traditional-
ly focused on the need to rethink the first
two pillars of the safety net. This paper, in-
stead, focuses on this third pillar of safety
net, where financial services can have the
most impact. As Carmen Rojas, CEO of the
Worker’s Lab said, “The social safety net
needs to be way broader than what it was
in the 20th century. It needs to be articu-
lated in different ways.” This report is not
an effort to divert attention away from im-
portant debates on how to reform the gov-
ernment safety net and the employer safe-
ty net. Instead, it is an effort to expand the
scope of the debate, and to provide some
new thinking on how financial services re-
medium to long term, there is a possibility
that labor markets in both industrial and
emerging markets will be more volatile.
This instability places strain on individual
and social constructs that have been creat-
ed to manage and mitigate against adverse
consequences from shocks.
• Government Safety Net: Government-
provided backstop social benefits such as
unemployment payments and welfare
• Employer Safety Net: Benefits that em-
ployers provide to their employees as part
of the employment contract either due to
a government requirement or to increase
likelihood of retention
• Individual Safety Net: Personal or com-
munity savings, credit, and insurance plans
that help to manage unexpected risks
form could benefit and help, even if only in
a small way, people to manage some of the
challenges that are likely to come in the la-
bor market in the future.
In order to generate new insights on the in-
tersection between the future of work and
financial services, we fielded a 25-ques-
tion survey in 8 markets, with 1000 work-
ing age respondents per market. We also
leveraged proprietary data from PayPal to
better understand the impact of the digital
economy on the future of work. Finally, we
conducted over 100 half-hour phone inter-
views with experts from over 25 countries
around the world.
P. 13
We asked experts the following four questions:

1. How do you think the way people earn

money will be different 20 years from
now? Do you believe we need to re-
think how people actually get paid for
their jobs differently in the future?

2. How can we better bridge the gap be-

tween people’s earnings and their ex-
penses if and when earnings are so
much more variable in the future?

3. How do we need to rethink savings,

access to credit, and retirement based
upon the changes that the future of
work may bring?

4. Are you positive or negative on finan-

cial technology’s ability to meet the
needs of those that will be impacted by
the future of work?

The insights generated from the responses we received formed the foundation of this
report.
As of September 30, 2018, we have over 20
million merchant accounts used for earning
an income, as well as over 254 million ac-
tive accounts used by individuals to move
and manage money using PayPal products
and services. We have seen the interaction
and intersection of income-earning and
retail financial services for some time. We
wanted to undertake this research study in
order to foster a robust discussion in the
financial services ecosystem about how to
engage in some fundamental reforms in
order to meet the future needs of our cus-
tomers. We also hope that sharing insights
from the financial sector could help to in-
form changes that might be needed in the
labor market and adjacent areas like gov-
ernment benefits, education, and health
care.
The only thing that is certain going forward
is change. That is why financial services
must adapt to the changes that are going
to occur in the future of work. The glob-
al economy is currently in the 10th year of
recovery from the 2008 financial crisis. The
possibility of another economic downturn
could drastically impact some of the find-
ings presented in this report. Nevertheless,
we believe that now is the time to funda-
mentally reimagine the retail financial ser-
vices ecosystem. As John F. Kennedy once
said, “The time to repair the roof is when
the sun is shining.”5
“The time to repair the roof is
when the sun is shining.”
John F. Kennedy
P. 14
The Future of Work: Hype vs. Reality
“The era in which the majority of the workforce provides labor
and talent in exchange for a predictable salary is passing.”
Arun Sundararajan, Professor and the Robert L. and Dale Atkins Rosen Faculty Fellow at New York
There are countless recent studies at-
tempting to predict what is going to hap-
pen in labor markets around the world. Un-
surprisingly, there are also many debates
around predicted scenarios – some hope
technological progress might finally allow
for the 15-hour workweek and abundant
leisure as forecasted by the economist
John Maynard Keynes, while some fear it
would spell the end of work, an argument
often dismissed as the “Luddite fallacy.”6 It
is difficult to sift through these studies and
separate hyperbole from reality. Despite
the multitude of views and scenarios pre-
sented in literature and in our discussions
with experts, our research findings have
coalesced around several clear themes.
While there is not enough evidence to pre-
dictively quantify the extent of change or
I. Automation, Machine Learning, and Artificial
Intelligence
There is much debate about whether ro-
bots will replace humans, and whether
automation, and other developments in
machine learning and artificial intelligence
(ML/AI) will displace jobs. There is far less
debate about technology causing and ac-
celerating job churn. Estimates vary widely
-- researchers at the University of Oxford
estimate that 57% of jobs in OECD coun-
University’s Stern School of Business.
compute the impact of different contrib-
uting factors, one of the overarching take-
aways from our study is that the notion
of a traditional full-time job is going to be
less common going forward, let alone the
idea of a single job for life. We can no lon-
ger take “a steady job with benefits” for
granted. Workers will have far more vari-
ability in their income-earning lives and
will have to adapt more frequently. Many
of the experts who were interviewed sug-
gested replacing the descriptor of “jobs”
with the nomenclature of “a portfolio of
opportunities”. The expectation of under-
taking multiple income-generating activi-
ties going forward is the result of several
changes that are transforming the labor
market. We have focused on the following
four areas of change:
tries are at risk of automation, whereas the
OCED itself calculated that just 14% of jobs
are at high risk.7 Many of the experts that
were interviewed as part of this project
subscribe to the notion that humans in-
vent value where none existed before and
therefore there would be a continued need
for humans to perform tasks in exchange
for monetary rewards going forward. Most
P. 15
believed that automation will be a positive
development for most of humanity, al-
though there will of course be those who
will be negatively affected, and solutions
must be put in place to aide those who are
impacted by the transition. The World Eco-
nomic Forum’s latest Future of Jobs Report
estimates that 75 million current job roles
may be displaced by technology, but 133
million new job roles may also be created.8
Automation is being driven by the pre-
cipitous drop in the cost of computing
power, the rise of data collection, and the
continued development and precision of
algorithms. These technological develop-
ments enable computers and robots to do
tasks that could previously only be done
by human beings. There are certain tasks
that experts predict are more likely to be
replaced over the next two decades. Auto-
mation of these tasks can cause a severe
devaluation of skills that have often taken
long periods of time for people to master.
Truck drivers have to take classes and se-
cure a specialized license, lawyers have to
spend years in post graduate schooling,
and radiologists have to do multi-year res-
idencies in order to become professionals.
Automation could potentially take over
large swaths of these tasks over the next
two decades. Automating professions such
as driving a vehicle could have broad im-
pacts, as there are over 3 million people
that drive for Uber alone globally.9 This
devolution of certain skills is a challenge
not only because of the time spent gaining
the now useless skills but also the time it
will take to gain new skills that could gen-
erate value in the economy. As Cher Pong
Ng, Chief Executive of SkillsFuture Singa-
researchers at the University of Oxford
estimate that 57% of jobs in OECD
countries are at risk of automation
whereas the OCED itself calculated that
just 14% of jobs are at high risk.
pore, puts it, “The disruption in the chang-
ing job market may cause some people to
restart at the bottom of the pyramid in
their new job.” The challenge is exacerbat-
ed because the jobs most likely to be auto-
mated are low-skill, and typically low-wage
jobs, held by those who are least prepared
for alternative careers.
The job churn caused by automation
will increase the need for retraining and
upskilling later in life. Dr. Daniel Tsiddon,
Professor of Economics at Tel Aviv
University and Founding General Partner
at Viola FinTech Fund remarked that,
“with technology accelerating changes and
disruptions, opportunities will open and
close faster. Job churn will increase, and
work will no longer be a continual process.”
The traditional model of education before
career will become obsolete, and lifelong
learning will become more of a norm.
As we enter into an era of “permanent
economic dislocation,10” we can expect to
P. 16
switch jobs frequently and will therefore
need to develop new skills and capabilities
throughout our lives. One study even
estimates that 65% of today’s grade-school
children may end up doing work that is yet
to be invented.11 In order to keep up with
the changes and stay competitive, the
structure of our lives will become much
less linear, as we will be learning while
working, and learning in between episodes
of working.
Rapid advances in automation and ad-
vancements in artificial intelligence are set
to continue. The economic relationship
between labor and machines has changed
from “whatever labor cost, it cost less than
the machines going idle” in the postwar
economy12 to “we estimate large and ro-
bust negative effects of robots on employ-
ment and wages across commuting zones”
in 2017.13 Industry is beginning to invest
heavily in artificial intelligence because of
the perceived opportunity for enhanced
efficiency and lower cost. IMF research es-
timates that 180 million jobs held by wom-
en globally are at risk of being displaced by
automation over the next 20 years.14 Six of
the fifteen “hot emerging jobs” on Linke-
dIn for 2019 relate to artificial intelligence.15
Carl Frey and Michael Osborne from Ox-
ford University studied 702 occupational
groupings and concluded that “47% of U.S.
workers have a high probability of seeing
their jobs automated over the next 20
years.”16 A recent McKinsey study found
that 30% of “work activities” could be auto-
mated by 2030, and 75 to 375 million may
need to switch occupational categories and
learn new skills.17 The productivity and in-
come gains from automation and artificial
intelligence, “just-in-time” business pro-
cesses, and desire for efficiency will likely
to continue to push automation further,
and subsequently displace jobs.
Workers that are at risk of automation cur-
rently appear to be unaware of what might
occur for them in the near future.Accord-
ing to our survey data, over 75% of workers
who are in jobs that are at a high risk of au-
tomation believe that over the next 5 years
their incomes will be more predictable or
there will be no change in predictability
compared to today.
There is far less debate about
technology causing and accelerating
job churn.
It is unclear whether the rate and pace of
the deployment and scaling of machine
learning/artificial solutions (ML/AI) solu-
tions across geographies, but it is possible
that automation may impact labor mar-
kets in emerging economies more slowly
because of the cost differential, and effi-
ciency gains from replacing existing labor
may not be as large as those in industrial
economies. Martin Fleming, chief econo-
mist at IBM, however, expressed concern
that employment in emerging markets
could be disproportionately impacted by
machine learning/artificial intelligence in
the medium term because many tasks
that have been outsourced from industri-
al to emerging economies are simple and
therefore are more suitable for the deploy-
ment of ML/AI solutions.
P. 17
II. Platform Economy
A multitude of terms are used in literature
to refer to the phenomenon of digitization
enabling new short-term task-based in-
come earning opportunities. Gig, platform,
contingent, independent, freelancer, and
crowdworker are sometimes used inter-
changeably to refer to this phenomenon.
One clarifying note we would like to offer at
the outset is that alternative work (without
a traditional employer-employee relation-
ship) has existed for some time. Over 90%
of net employment growth from 2005 to
2015 in the US was in the alternative work
category. In other words, nearly all of the
10 million jobs created between 2005 and Nearly all of the 10 million jobs created
2015 in the US were not traditional nine- between 2005 and 2015 in the US were
not traditional nine-to-five jobs.
to-five jobs.18

Independent workers have always been

part of industrial economies, but the Inter-
net, and the pervasiveness of mobile tech-
nology, have transformed the scope and
scale of freelance or gig work – we refer to
this phenomenon as the platform econo-
my. Already, nearly 1 in 4 Americans earn
money from the “digital platform econo-
my”, according to a Pew Research Study.19
Our survey research finds that these on-
line platform economy workers are doing
quite well financially. Nearly 75% of respon-
dents to our survey working in the online
platform economy said they could cover
more than 3 months of expenses if they
lost their main source of income, higher
than almost any other subset we studied.
Moreover, 86% of our survey respondents
who participate in the online platform
economy said that they feel like they have
control over how much income they make
each month, compared to 75% of overall
respondents. But as more freelancers join
in to power the growing platform econo-
my, it is possible that the labor and talent
they supply will become less specialized
and more commoditized, which would
put downward pressure on the rent these
workers are able to capture. In discussions
with experts there is a serious concern that
platform workers will soon live financial
lives that are more similar to traditional
independent contractors. Our survey re-
search finds that these independent con-
tractors have serious financial challenges;
only 65% of the independent contractors
in our survey reported that they can cover
their monthly expenses with their current
income, a lower percentage than any de-
mographic we studied.

P. 18
The online platform economy lacks some
of the traditional barriers to entry associ-
ated with employment and enables people
to earn an income even if they may be in
a different location, lack certain networks,
and have divergent qualifications or licens-
es than what might have previously been
required. Platforms enable frictionless
work relationships to be created instantly,
but these relationships can also be broken
just as quickly and easily.
Many workers on the platform economy
in industrial and emerging markets are
currently supplementing a traditional full-
time job with “gigs” during off-hours, while
others use it as a primary source of econ-
omy. According to a study by the Interna-
tional Labor Organization, 32% of “crowd-
workers” said complementing pay from
other jobs was the main reason for doing
the work, while about one-third of respon-
dents also stated that crowdwork was their
primary source of income.20 For those that
did consider crowdwork to be a primary
source of income, they stated that it only
comprised about 59% of total income,
again supporting the idea of a portfolio ap-
proach to work and income generation.21
The platform economy also enables indi-
viduals to earn an income from assets that
were traditionally very difficult, or no one
thought to monetize. Just to name a few,
one can now sell a part-time usage of one’s
house, car, energy, cell phone minutes, In-
ternet service—and even one’s personal
data—in order to earn an income. These
additional income-earning opportunities
can help to fill gaps between income and
expenses as labor-market opportunities
become less reliable. Ray Boshara, Direc-
tor of the Center for Household Financial
Stability at the Federal Reserve Bank of St.
Louis believes that, “identifying and mone-
tizing a broader range of assets that could
generate some kind of income,” would be
important in helping to address future la-
bor market challenges.
As automation puts pressure on certain
traditional full-time job categories, these
platform jobs could become increasing-
ly important and common. China’s State
Information Center estimates that the
“sharing economy” in China will grow by 30
percent annually over the next five years.22
Moreover, if changes are made in health-
care or pension markets to increase base-
line universal coverage, then one could
imagine the platforms growing further in
importance due to the increased flexibility
that they bring.
China’s State Information Center
estimates that the “sharing econo-
my” in China will grow by 30 percent
annually over the next five years.
The platform economy also has the poten-
tial to transform large traditional business
organizations.23 Qing Cao, Professor at the
University of Illinois and former research
scientist that IBM Watson Research Center,
argued that in the future businesses might
be organized around “functionalities” rath-
er than traditional “segments.” This type of
organizations could enable functional tasks
to be distributed more easily to contingent
workers, which will further accelerate the
growth of the “gig population” as business
models evolve to operate with a leaner full-
time workforce.
P. 19
The gig economy is nothing new in emerg-
ing economies, where piecing together
multiple jobs in order to make ends meet
has been the norm. Most of the emerging
market experts we spoke to viewed digital
platforms as a net positive for emerging
Informal employment as a percentage of total employment25
100%
80%
60%
40% 85.8%
68.2% 68.6%
20%
0%
Africa Asia and Arab
the Pacific States
Source: International Labor Organization
In developing economies, there are 230
million people, nearly two-thirds of wage
earners in the private sector, that receive
their salaries in cash.26 Their wealth tends
to grow at the rate of inflation because they
are cash-based and rarely have long-term
savings or investments. There is a fear of
the complexities and costs associated with
economies. There was hope that platforms
could bring more workers into the formal
economy, a persistent challenge in emerg-
ing markets. The International Labor Orga-
nization reports that there are over 2 billion
working in the informal economy globally.24
61.2%
53.1%
25.1%
18.1%
North Latin Europe & World
America America & Central Asia
the Caribbean
regulation and taxes that has traditionally
kept major swaths of the population in the
informal economy. Technology has the abil-
ity to abstract away that complexity, lower
the costs, increase incomes, and therefore
draw new waves of individuals into the for-
mal economy. This is viewed as a major net
positive for emerging economies.
P. 20
 “independent is the new normal”

Samaschool, a program of Samasource, be- has been working to plug marginalized

lieves that “independent is the new nor-
mal” and focuses on upskilling and pre-
paring low-income populations to succeed
as independent workers in the platform
economy. Phillip Kudakwashe Chikwirama-
komo, Senior Director for Impact Solutions
based in Nairobi, Kenya, noted Samaschool
communities into the digital platform
economy, including refugees and those at
the base of pyramid. During the past de-
cade, they have successfully helped over
10,000 people in emerging markets find in-
ternet-based work.

Case study: Anudip Foundation, India. Anudip Foundation trains workers in

India ages 18-25 who are coming from traditional informal sectors into the pro-
fessional world of digital services (i.e. travel, transportation, e-commerce). Every
year Anudip Foundation helps 25,000 workers to transition into the formal plat-
form economy; impacting over 100,000 family members annually.

The platform economy is also viewed as
an opportunity for minority groups who
have traditionally struggled to secure an
income. For example, women in emerging
markets who cannot leave the home due
to security can now earn an income. Indi-
viduals with disabilities can perform cer-
tain tasks through their computers that
they traditionally would have been unable
to do. Dr. Yang Weiguo, Dean of the School
of Labor and Human Resources at Renmin
University of China, agreed with the po-
tential of the sharing economy to “reduce
discrimination and provide more employ-
ment opportunities.”27 Although there are
biases that remain in these platforms (as
discussed in further detail below), they do
present an opportunity for traditionally
marginalized groups.
The technological changes in the form of
automation and the platform economy
may have divergent implications for in-
dustrial and emerging markets in the short
term, but there is the long-term likelihood
of a major convergence. As Brookings Fel-
low Zia Qureshi put it, “The change from
technology will be global. There are differ-
ences across economies, but the technolo-
gy will have global impact.”
“The change from technology will
be global. There are differences
across economies, but the technol-
ogy will have global impact.”
Zia Quresh, Brookings Institution

P. 21
III. Socio-Demographic Changes
The transition towards greater flexibil-
ity with work in industrial markets is in
part driven by several socio-demographic
changes.
Age: Millennials, those born between 1982-
1999 make up 28.4% of the global popula-
tion.28 This generation of younger workers
in industrial markets is taking a very differ-
ent approach to work. They favor flexibility
and seem to be more comfortable with job
churn. A study done by LinkedIn in 2016,
found that people who graduated from
college between 2006 and 2010 had nearly
double the jobs in their first ten years out
of college than their parent’s generation
when they graduated from college.29 A 2016
Gallup poll in the US found that 21% of mil-
lennials reported changing jobs in the last
year; more than three times the number
of non-millennials.30 Based on more than
40,000 responses from millennials and
non-millennials alike, PricewaterhouseC-
oopers’ NextGen: A Global Generational
Study found that millennials have a new
approach to workplace productivity and
flexibility; the millennial generation does
not believe that productivity should be
“measured by the number of hours worked
at the office” but rather “by the output of
the work performed.”31 An Allianz survey of
1000 millennials in 5 markets found that
they wanted jobs that left time for “other
things in life.”32 A 2016 survey of millennials
by Deloitte found that 75% wanted more
opportunities to work remotely.33 In emerg-
ing markets, people have long had flexible
work arrangements and so this shift may
not be a disruption in those markets. Of
course, millennials still have a strong desire
for stability in their lives, but they also de-
28.4%
Millennials
Millennials, those born between 1982-
1999 make up 28.4% of the global
population.
sire flexibility alongside that stability.
Younger people globally are also far more
flexible in where they choose to live, and
therefore work. In fact, there have nev-
er been more people living outside their
country of birth in recorded history.34 Some
of this is not by choice, as there are more
refugees than at any point before, many of
whom are younger in age.35 But there are
also other more fortunate people who are
mobile because they want to avoid being
tied down to a particular place and want
to explore and enjoy the flexibility to try a
new place whenever they want. This desire
to be flexible in living arrangements has
in part led to a drop in homeownership in
industrial markets among younger popula-
tions.36 Technology is enabling this flexibili-
ty in terms of work hours and location. Ac-
cording to our survey data, around 75% of
millennial respondents said that they be-
lieved over the next 5 years more than 50%
of their jobs would be impacted by new or
changing technology.
P. 22
Globally, people are living longer and there-
fore may need to work longer, which may
go hand-in-hand with more job switches.
Industrial economies have set up public
and private retirement and pension savings
plans based on the assumption that peo-
ple would work for 40 years or so, and then
would require support from and depend
on the system for only 10 to 20 years. With
life expectancy rising globally, there will be
a need to rethink these assumptions. The
following two charts show the significant
rise in life expectancy and share of elderly
populations around the world.37 By 2050,
the share of world population aged 65 and
above will have doubled from 10% to 20%.
38
This trend is not likely to reverse and may
even continue over the next few years with
medical and public health advances in early
childhood and aging populations.

Increase in life expectancy at birth - 1960 vs 2016

0% 10% 20% 30% 40% 50% 60% 70%

World 37%
Upper middle income countries 52%
Sub-Saharan Africa 50%
South Asia 64%

OECD members 19%

North America 14%
Middle income countries 50%
Middle East & North Africa 57%
Low & Middle income countries 49%
Latin America & Caribbean 35%
Least developed countries 60%
Europe & Central Asia 15%
East Asia & Pacific 56%
Central Europe & Baltics 13%
Arab World 52%

Source: World Bank

P. 23
 Increase in population over 65 as a percentage of overall
population between 1967 and 2017 (in percentage points)

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

Arab World 0.85

Central Europe & Baltics 9.12

Caribbean small states 4.17

East Asia & Pacific 6.58

Latin America & Caribbean 4.16

Middle East & North Africa 1.25

North America 6.04

South Asia 2.44

Sub-Saharan Africa 0.14

World 3.52

Source: World Bank

Gender: The changing role of women in
the labor force is also a noteworthy trend
that will likely impact the future of work.
The percentage of women participating in
the labor force has remained fairly consis-
tent over the last 20 years in OECD econ-
omies.39 In certain emerging markets there
has been a marked rise in female participa-
tion in the labor force, as they were oper-
ating from very low baselines.40 Women’s
earnings and their subsequent contribu-
tion to household income have been in-
creasing in OECD economies over the last
40 years.41 A 2015 report from the Center
for American Progress found that 42% of
mothers were the sole or primary bread-
winners in their family.42 Women’s earn-
ings, however, globally continue to be be-
low their male-counterparts, which might
explain in part why only 64% of female re-
spondents to our survey reported feeling
confident about their ability to reach their
financial goals, compared to 71% of male
respondents.
Dual-income households have become
more of a norm in the US in the decent
decade, rising from just 25% of households
in 1960 to 60% of households in 2012.43
Among younger populations, dual-income

P. 24
households may be becoming a trend glob-
ally. A 2015 Ernst & Young study of nearly
10,000 adults from 8 markets around the
world found that 78% of millennial respon-
dents had a spouse or partner working
at least full-time, twice more likely than
Boomers.44 Rising costs for child care facil-
ities will likely make flexibility in hours an
increasingly important demand. Simulta-
neously, single parent households are also
becoming more common in industrial mar-
kets – another trend that warrants a pref-
erence for flexible work hours.45 Single par-
ent households, 81% of which are helmed
by women in the U.S.46, might also explain
in part why 52% of women respondents to
our survey reported that they would be
very stressed if they lost their main source
of income.
Location: Urbanization is another major
trend that will drive the future of work.
Data from the United Nations Population
Division shows that 54.8% of the world’s
population lives in cities in 2017; up from
34% in 1960.47 The UN researchers esti-
mate that by 2050, there will be twice as
many people living in cities than in rural
areas.48

Increase in percentage of population living in cities

between 1987 and 2017 (in percentage points)

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Arab World 9.6

Central Europe & Baltics 1.7

Caribbean small states 2.9

East Asia & Pacific 26.2

Latin America & Caribbean 18.0

Middle East & North Africa 11.3

North America 7.0

South Asia 9.3

Sub-Saharan Africa 13.8

World 12.9

Source: World Bank

P. 25

A major reason people are moving to urban
areas is the increased economic opportu-
nity in both formal and informal sectors.
In Africa, the informal sector has been ab-
sorbing rising urban populations over the
past decades.49 There remain, however,
large segments of the global population liv-
ing in rural areas. Understanding the labor
and income challenges of individuals in ru-
ral areas will also be crucial in preparing for
the future of work. Notably, 67% of our sur-
vey respondents who live in rural areas had
below-median savings on a monthly basis.
The nexus of the various demograph-
ic shifts discussed above – longer life ex-
pectancy, changing role of women in labor
force, urbanization – is where even more
interesting developments might emerge.
The nexus of the various demo-
graphic shifts longer life expec-
tancy, changing role of women in
labor force, urbanization is where
even more interesting develop-
ments might emerge.
Albert Francis Park, Director of the Insti-
tute for Emerging Market Studies at the
Hong Kong University of Science and Tech-
nology raised the example of young peo-
ple in rural villages in China who want to
have an experience and secure a stronger
economic future, so they are moving into
cities. These demographic changes are go-
ing to amplify one another and continue to
transform labor markets around the world.
P. 26
IV. Entrepreneurship
Premal Shah, CEO of Kiva, an international
microlending nonprofit organization, pre-
dicts a future with “mass entrepreneur-
ship” and “an artisanal economy” with
some choosing the path by choice and
some due to necessity. A challenge with
traditional entrepreneurship has been the
risk calculus when comparing the conse-
quences of failure with a “steady job.” This
challenge can often acutely affect new and
smaller firms. When observing business-
es in the EU over a four-year period from
2008-2012, Europa found that survival
rates for businesses are inversely related
to the size of the enterprise. However, dig-
itization is helping to level the playing field
between large and small firms. In Canada,
digital businesses grew 28x faster than tra-
ditional businesses in 2017.
As “steady jobs” become less common due
to automation, platform economy, and
demographic changes, the risk associated
with entrepreneurship becomes more pal-
atable and acceptable. Asif Faruque of Lev-
el 39 (a UK community hub for startups)
noted that, “entrepreneurship thrives in
periods of uncertainty.” Entrepreneurship
also thrives in periods of innovation and
digitization.
In addition to enabling the platform econ-
omy, digitization is removing some of the
entry barriers that have traditionally pre-
vented individuals from becoming entre-
preneurs. An individual anywhere in the
world can now launch a business online and
immediately access millions of customers
globally. Global ecommerce sales is expect-
ed to reach $4.5 trillion by 2021, which is
an unprecedented opportunity that the
digital world provides to entrepreneurs.50
Small businesses that take advantage of
this global opportunity see a 34% increase
in productivity within the first year and
are 11% more likely to survive.51 Moreover,
a multitude of Internet intermediaries can
help with website design, marketing, pay-
ments, back end processing, and customer
service. The digitization of micro-entrepre-
neurship could unlock new income-earning
opportunities for hundreds of millions of
micro-enterprises around the world.
This rise in entrepreneurship also interre-
lates with the rise of the platform economy
in another interesting way, as many of these
micro-entrepreneurs will rely on a variety
of platforms in order to achieve economies
of scale necessary for securing certain ser-
P. 27
vices. For example, a jeweler may list his/
her product offerings on multiple digital
commerce platforms to increase sales and
ship products in bulk, at discounted ship-
ping rates. In fact, entrepreneurs who sold
on two online marketplaces instead of just
one averaged 190% more sales revenue
than single-marketplace retailers.52
Micro-small-medium enterprises (MSMEs)
are critical to creating a sustained and
healthy economy. In the U.S. small busi-
nesses make up 99% of all businesses and
were responsible for 60% of the net new
jobs during the height of the economic re-
cession between 2008-2013.53 In the EU,
SMEs contribute 57% of value added in the
EU overall, and countries within the EU
with higher SME prevalence, experience
higher economic growth.54 And in India,
while MSME contribution to the total GDP
is 37%, a KPMG report found that digital
dividends for entrepreneurs could increase
MSME contribution to India’s GDP by 10%
by 2020.55 56
The vast majority of workers in emerging
economies could be considered entrepre-
neurs; whether they are informal workers
running a small food stall or a micro-en-
terprise manufacturing artisanal product.
Many of these businesses remain in the in-
The vast majority of workers in
emerging economies could be con-
sidered entrepreneurs.
formal economy due to several factors in-
cluding literacy and awareness, regulation,
and taxation. Digitization could result in a
large enough rise in revenue and a lowering
of costs and headaches, that we could see a
movement towards formalization of micro
enterprises in emerging markets. Digitiza-
tion provided $193 billion boost to world
economic output and created 6 million jobs
globally in 2011 while emerging economies
saw some of the greatest gains including
94% of global employment impact.57 These
emerging markets, recognize this trend of
micro-entrepreneurs being the gateway to
stimulating economic growth and address-
ing poverty crisis. World Bank statistics
have shown microenterprises in develop-
ing economies contribute more than 60%
of GDP and more than 70% of total em-
ployment.58 This trend can continue to lift
up the underserved as digitization feeds
entrepreneurship which in turn feeds job
creation and better economic health.
P. 28
The Impact of the Future of Work
on Retail Financial Services
“With new jobs come new rules.”
Dr. Tao Kong, Associate Research Fellow at
Institute of Social Science Survey and Institute of Digital Finance, Peking University

Retail financial services were largely designed for fixed salary employees who might work
a handful of jobs between ages 20 and 60 and would then settle in for a 10- to 20-year
retirement. As the labor market evolves based upon the trends described above, every
facet of the retail financial services landscape will also need to adapt accordingly. In other
words, changes in the way money is earned ought to be accompanied by changes in the
way money is paid, managed, and intermediated, in order to adaptively optimize people’s
capacity to build a stable life and seize opportunities in a world of new work arrangements.
In fact, the relationship between financial services and workforce fluctuations will become
even more closely tied, as Cher Pong Ng, Chief Executive of SkillsFuture Singapore, noted,
“It is difficult to have career resilience, if financially you don’t have the resilience to man-
age the shock and transitions.”

I. Payments: Inflows and Outflows

Payments are the architecture upon which
other financial services can then be built.
Payments will likely have to undergo some
fundamental shifts to respond to the
changes that are going to occur in the labor
market. Moving from nine-to-five employ-
ment to work that’s characterized by an
expected increase in job churn and prev-
alence of gig work, means a shift from sin-
gle-source predictable lump sums paid at
regular intervals towards multiple streams
and sources of variable, unpredictable, and
likely smaller incomes, which has implica-
tions on the timing, frequency, and struc-
ture of payments services.
Inflows - Demand for simplicity and re-
liability: : The corollary of growth in job
churn and the platform economy is the
need to integrate for payments with new
income providers, which entails building
new contracts and financial relationships.
Also, some of the income streams received
by workers in the platform economy can
be less than reliable at times. For example,
70% of freelancers in New York reported
having had at least one job that they did
not get paid for.59 Payments solutions need
to be more streamlined and sophisticat-
ed to match and facilitate the increase in
multiplicity and complexity of work ar-

P. 29
rangements and labor relations. In addi-
tion, many individuals in emerging markets
engaging in the platform economy often
have to pay excessive costs to access their
income due to the high cost of traditional
remittances. Moreover, the payers in these
transactions are often on the other side
of the world and so trust and reliability in
these payments is crucial. As technology
allows independent workers and micro-en-
trepreneurs to trade their products, ser-
vices, and assets online and across borders,
cross-border payment solutions are likely
to increase in importance.

Inflows - Need for rapid transfer and re-

al-time access: Being able to get paid im-
mediately for work that is completed will
be an important development for workers
going forward. Rapid transfer of money
from the payer to the payee is incredibly
important to enable people to better han- other expenses will become increasingly
dle short term expenses and offset certain important for their financial health.
shocks. According to our survey, 77% of
Outflows - consumption smoothing: The
small business owners said they would like
variability in income raises challenges for
to receive their income more frequently,
workers as most expenses are relatively
compared to only 49% of overall respon-
fixed in set increments, thereby enhancing
dents. Moreover, real-time payments to
the need for consumption smoothing and
platform economy workers through Pay-
more active and vigilant money manage-
Pal’s recently-acquired Hyperwallet plat-
ment. According to our survey data, 39%
form have increased by more than 200%
of independent contractors that we sur-
year-over-year. While serving the import-
veyed report feeling like they do not have
ant function of consumption smoothing,
control over how much income they make
real-time access to cash can also be cou-
each month, compared to only 25% of all
pled with smart budgeting and savings
survey respondents. Innovative tools for
solutions to ensure that income is made
financial well-being are an important part
available within a structure that promotes
of Walmart’s efforts to train and upskill
discipline with regards to spending. More-
its employees for the future of work. Over
over, with increasing income variability and
300,000 Walmart associates use the Even
uncertainty, giving people a real-time view
app for getting paid on demand, budget
of how much a particular payment will im-
instantly, and save automatically.60 “Pre-
pact their savings and ability to manage

P. 30
liminary data shows that these new tools
are very efficient at managing financial in-
flows and outflows,” said Gayatri Agnew of
Walmart, “which is appealing to our associ-
ates.” Some of the developments in savings
and credit described below could be cou-
pled with payments solutions to deliver a
certain level of stability to workers in the
future.
Outflows – expense management: Man-
aging outflows of payments to take care of
expenses is another challenge. 55% of small
business owners in our survey dataset said
they have paid a bill late and incurred ad-
ditional fees or interests as a result in the
past 12 months, compared to 41% of overall
respondents. Benjamin Fernandes, CEO of
Tanzanian fintech startup NALA, remarked
that NALA’s transaction history tool is one
of its strongest value propositions because
most of NALA’s customers could not tell
how much money they had spent in the
previous week. Moreover, most expenses
cannot normally be paid for ahead of time.
With incomes being more variable in the
future, individuals would benefit from the
ability to pay down future expenses when
they have a large inflow.
Push for digitization: Most people around
the world continue to be paid for their
Moving from nine-to-five employ-
ment to work that’s characterized
by an expected increase in job churn
and prevalence of gig work, means a
shift from single-source predictable
lump sums paid at regular inter-
vals towards multiple streams and
sources of variable, unpredictable,
and likely smaller incomes, which
has implications on the timing, fre-
quency, and structure of payments
services.
work in cash, and many emerging econo-
mies are primarily cash-based economies.
In Brazil, for example, only 30% of personal
consumption is paid digital and only 48%
of salaries are paid digitally.61 There have
been some exceptions to this trend (i.e.
China, Kenya, and Tanzania) where mobile
payments have taken a significant mar-
ket share. As work becomes increasingly
digitized and involves more remote and
multiple partners in the future, the expec-
tation for digitizing payments to facilitate
transactions will likely go up accordingly. A
strong infrastructure for digitized payment
flows will set a foundation upon which solu-
tions in savings, credit, and financial man-
agement can be offered efficiently at scale.
P. 31
II. Savings: Short and Long Term
There is no evidence that expenses will become much lower in the future. In fact, the
trend towards urbanization could drive up expenses for those who might be most affect-
ed by the changing nature of work. The increase in work through the platform economy
and the shift by traditional employers towards a more task-based model for workers will
continue to drive variability and unpredictability in earnings. As a result, more and more
people will earn to spend, but not earn to save. Savings need to be reimagined to become
more convenient and effective instruments of consumption smoothing and financial in-
termediation in the future.

“People talk a lot about income inequality but not volatility. Vol-
atility is an enormous problem. This is a technical problem that
financial companies can solve.”
Louis Hyman, Associate Professor at Cornell University’s
School of Industrial & Labor Relations

Need to afford lifelong retraining: Sav-
ings will be particularly important if and
when an individual loses a job due to au-
tomation and has to retool or upskill for a
new position. These savings will be a key
factor determining the success the indi-
vidual can achieve in adapting to the new
labor market, as savings will be imperative
to cover expenses during episodes of un-
employment and/or retraining. Only 38%
of workers who responded to our survey
in jobs with a high risk of automation re-
ported having savings to cover 6 months of
expenses if they lost their primary source
of income.
Savings may also be important even after
the individual has secured a new position. A
major challenge of job churn that’s caused
by high-speed automation is that when
individuals are eventually able to secure a
new position, they will likely enter that new
position at the bottom rung of the ladder;
even if they were at the top rung in their
old position. Greg Medcraft, Director of the
OECD Directorate for Financial and Enter-
prise Affairs, argued that individuals will
need to consider creating a “bigger buffer”
to offset some of the fluctuations that will
occur and recur in income going forward.
In the US, educational lending debt already
stands at nearly $1.5 trillion, doubling what
it was before the 2008 financial crisis. No-
tably, borrowers over 35 have substantially
increased their proportion of educational
lending debt in the US.62 Lifelong learn-
ing will require a reimagination of debt fi-
nancing as well as a much more carefully
planned and efficient set of savings mech-
anisms to be created.

P. 32
Need for quality savings mechanisms:
Short-term savings will continue to be a
key instrument for mitigating the mis-
match between variable income streams
and consistent expenses; this will be true
across income levels. There might be a
greater need for savings mechanisms
among independent contractors, as only
28% of independent contractors that we
surveyed said they make a consistent in-
come each month, in sharp contrast to
72% of all survey respondents. Separating
savings goals that can be used for short-
term expenses and those that must be
saved, if possible, for long-term expenses
will be an important tool for workers. Digi-
tal technology holds the potential for more
secure and valuable savings solutions, as it
helps societies move away from cash and
Saved using a savings club or a person outside
the family (% age 15+)
25%
20%
15%
23%
10% 20%
5% 12% 13%
8% 7%
0%
Low income countries Lower middle
income countries
Source: Global Findex, World Bank
create new and higher quality savings op-
portunity outside of keeping cash under
the mattress and having it grow at the rate
of inflation, which will be particularly ben-
eficial for those at the bottom of the pyr-
amid. In emerging markets, savings circles
have existed for some time as a solution
to enable community members to pay in
and draw down to manage expense spikes.
In fact, according to the Global Findex, the
percentage of population that saved us-
ing a savings club or a person outside the
family went up between 2011 and 2017,
everywhere except in high income coun-
tries.63 While there are many variations of
savings clubs and their mix of characteris-
tics and value propositions differ (e.g. peer
pressure, flexibility, reliability), it is clear
that there is a growing demand for savings
mechanisms.
10%
8%
5% 5% 6%
3%
Middle income Upper middle
countries income countries
2011 2014 2017
P. 33
Saving for micro-enterprises: Short-term
savings are also important for micro-en-
terprises and small businesses, which are
often the backbone of communities and
economies around the world. Credit is not
the sole solution for catalyzing a business.
The vast majority of micro-enterprises in
industrial and emerging markets continue
to be funded through savings either in-
dividual, family, and community. Among
young adults aged 15 to 24, the percent-
age of those who saved for the purpose of
starting, operating, or expanding a farm or
business increased between 2014 and 2017
across income levels. Savings, however, can
be a major challenge for entrepreneurs
who are constantly looking to reinvest
extra money into growing their business.
Saving for the future is a difficult propo-
sition when there are immediate business
opportunities and needs to satisfy. Solving
for this need will be even more import-
ant, as more people leverage the platform
economy and digital technology to start
their own businesses.

Saved to start, operate, or expand a farm or

business, young adults (% age 15-24)

0% 5% 10% 15% 20%

15%
Low income countries
17%

8%
Lower middle income countries
10%

11%
Middle income countries
12%

14%
Upper middle income countries
15%

8%
High income countries
15%

11%
World
13%

Source: Global Findex, World Bank 2014 2017

P. 34
Short-term savings shortfalls: Despite its
importance, short-term savings shortfalls
are observed around the world. In the US,
40% of Americans do not have enough in
savings to cover an emergency $400 ex-
pense.64 According to data from the Global
Findex, over half of adults around the world
did not save any money in the year lead-
ing up to data collection in 2017.65 In fact,
the percentage of population increased
between 2014 and 2017, across almost all
income levels.

Did not save any money in the past year

(% age 15+)

0% 10% 20% 30% 40% 50% 60%

48%
Low income countries 52%

55%
Lower middle income countries
60%

47%
Middle income countries 57%

39%
Upper middle income countries 54%

30%
High income countries 29%

52%
World
44%

Source: Global Findex, World Bank 2014 2017

Long-term savings gap: Saving for the
long term is very difficult and challenging
when short-term expenses are matching
or exceeding income. Solving short-term
savings issues can therefore help unlock
opportunities in long-term savings.
Absent broader changes in safety nets and
mechanisms for long-term savings, tax-ad-
vantaged retirement savings will become
a reality for an increasingly small segment
of the global population. The International
Longevity Center analyzed cross-sectional
data to calculate the retirement savings
gap and found that reliance on public pro-
vision plus any current mandatory pension
schemes will only be sufficient to deliv-

P. 35
er adequate retirement incomes in 3 out
of 30 OECD and other developed econo-
mies.66 The retirement savings gap can be
attributed to persistently low median in-
come growth and record low global inter-
est rates, generally low levels of financial
capability, and the aforementioned demo-
graphic shifts (rising life expectancy, stag-
nant retirement age and increased medical
expenses). According to the World Eco-
nomic Forum, the retirement savings gap
for the eight largest pension markets will
grow to $400 trillion by 2050.67 Two-thirds
of Americans don’t contribute anything to
a 401(k) or other retirement account that’s
made available through their employer.68 A
report by Prudential revealed that among
the 50% of private-sector workers who
have access to some form of workplace
retirement plan, the share covered by a
defined benefit (DB) plan fell from 83% in
1980 to 18% in 2011. The shift from defined
benefit (DB) plans to defined contribution
(DC) plans, i.e. from traditional pensions
to individual savings, as the primary vehi- The percentage stands at 56% for high
cle for retirement savings means individ- income countries and 91% in low income
uals are now required to shoulder more countries. On the other hand, our survey
responsibilities.69 Only 13% of our survey also revealed differences on this point in
respondents say they are “very confident” terms of location, where we found that only
they’ll have enough money to provide 14% of rural respondents said that they felt
for a comfortable retirement.70 The need very confident they would be able to retire
and demand for quality long-term savings at their desired age, compared to 24% of
solutions will increase, due to a heightened urban dwellers and 21% of all respondents.
sense of individual responsibility, feeling of
insecurity, and the pressure to save and in-
vest appropriately for retirement in a lon-
Savings need to be reimagined to
ger life.
become more convenient and ef-
According to the Global Findex, an over- fective instruments of consumption
whelming majority (79%) of the world pop- smoothing and financial intermedi-
ulation did not save for old age in the 12 ation in the future.
months leading up data collection in 2017.

P. 36
Long-term savings has been a perennial
challenge in emerging markets. Govern-
ment and community-based savings pro-
grams exist, but these are not adequate
or particularly efficient solutions to the
growing challenge of longer life expectancy
in developing countries. Long-term saving
solutions provided by the private sector
are beginning to pop up in emerging mar-
kets, but there is still much that needs to
be done.

Did not save for old age in the past

12 months (% age 15+)71

0% 20% 40% 60% 80% 100%

93%
Low income countries 91%
88%
Lower middle income countries
87%
79%
Middle income countries
84%
70%
Upper middle income countries
81%
62%
High income countries
56%
76%
World
79%

Source: Global Findex, World Bank 2014 2017

Long-term savings via asset acquisi-
tion: Assets such as jewelry and real es-
tate have long represented a longer-term
savings opportunity for individuals and
families around the world. However, with
people desiring more flexibility in where
they live and having more variable income
streams, there is starting to be a stronger
preference for renting property instead
of buying and owning. Entrepreneurs are
also avoiding large real estate investments
and are instead using co-working spaces to
launch their businesses. Long-term sav-
ings through assets, however, could be a
reality for more people if the products and
services are created in a way to enable peo-
ple to own smaller pieces of an asset.

P. 37
Case Study: Sam

Understanding financial health through the prism of the future of work is a complex mat-
ter, so we undertook a thought experiment, creating an average worker in today’s economy
– Sam – and running a series of regressions to understand the impact of various changes
on her financial life. While the analysis is not exhaustive, the following results from sce-
nario simulations are statistically significant, and they reveal interesting connections that
warrant further attention and study. Details on our analysis are contained in Appendix III.

Anchor Profile: Sam is a married 30-year-old female physical therapist with a mas-
ter’s degree and a full-time steady job at a hospital in a city in the US. She belongs
to a two-income household with above-median income.

Holding everything else constant, and based on a 90% confidence interval,

• If Sam’s job were at high risk of automa-
tion, she would be 15% less likely to be able
to cover 6 or more months of expenses
with savings, if she lost her main source of
income.
• If Sam were an online platform economy
worker, she would be 16% more likely to feel
a sense of control over her income than in
her current job. However, she would also
be 22% less likely to have paid all her bills
on time over the last 12 months. Also, she
would be 41% more likely to prefer receiv-
ing income from work via digital payment
applications.
• If Sam were an independent contractor,
she would be 53% less likely to make con-
sistent income each month.
• If Sam were a Gen Xer, she would be 16%
less likely to prefer receiving income from
work via digital payment applications.
• If Sam were male, he would be 31% less
likely to be stressed about making the
money needed each month, if he lost his
main source of income.
• If Sam lived in an emerging market [Bra-
zil, India, China], she would be 63% more
likely to be able to cover 3 months of ex-
penses and 123% more likely to be able to
cover 6 months of expenses if she lost her
main source of income.
• If Sam lived in a rural area, she would be
25% less likely to be able to cover 3 or more
months of expenses with savings, if her
main source of income is lost.
• If Sam owned a small business, she would
be 27% less likely to make consistent in-
come each month. She would also be 33%
more likely to prefer receiving income
more frequently.
P. 38
III. Credit
Credit assessment models have evolved
tremendously in the past several decades.
The current models used for credit assess-
ment are a far cry from what Bill Fair and
Earl Isaac used to assess investments when
they created FICO in the 1950s. Neverthe-
less, there is a major need for innovation
in credit models for both individuals and
businesses. Most traditional credit models
use a set of previous financial metrics that
can be an inaccurate representation of an
individual’s credit worthiness. Several ex-
perts we interviewed also suggested that
the path forward will have to be assessing
the individual’s probability of earning, in-
stead of only past earning.
Outdated modes of underwriting and as-
sessing creditworthiness: A basic premise
of traditional credit-worthiness has been
having a stable income stream from a rep-
utable employer. For example, in Sweden,
a fixed long-term employment contract is
a perquisite for securing a housing loan.72
Banks in Bosnia are not as willing to dis-
burse loans to people who could not prove
they have a contract with an employer for
more than one year.73 Individuals with mul-
tiple streams of income applying for credit
struggle to aggregate those earnings into
a statement that would make sense to a
credit provider. Alternative forms of data
are beginning to be adopted into cred-
it scoring models to look beyond simply
past credit usage and income. Looking into
broader factors like payments history, net-
works, and behavioral factors could help
to yield more accurate risk analytics and
better credit decisions. Moreover, the larg-
er volume of data being collected and an-
alyzed can unlock new and better insights
into credit worthiness. For example, with
access to a portion of the user’s phone
data, applications such as Smart Finance
in China and Branch in Kenya, Tanzania
and Nigeria, build on the success of mobile
banking and rely on algorithms to analyze
hundreds of variables, including typing
speed and frequency of battery recharge,
to make micro-loan decisions.74 There
are also experiments around disbursing
against liquid assets and deposits, or fu-
ture potential earning. Traditional forms
of credit were not designed for the way in
which people will be earning an income go-
ing forward, and the basis of underwriting
credit products needs to be updated and
redefined in the future.
Outdated modes of delivery - mismatched
schedule and structure of repayment:
Repayment of credit has traditionally been
P. 39
structured and scheduled as a series of to smooth out their income streams more
fixed payments on a standard cadence. frequently.
However, this mode of delivery will not
Small business credit gap: With a rise in
match up well with an increasing portion of
entrepreneurship globally, access to small
the labor market, as more and more people
business credit is going to become an in-
make a living by patching together variable
creasingly important issue. For entrepre-
and unpredictable earnings from multiple
neurs, cash flow is uneven and thus tradi-
sources. There is a need to redesign the
tional credit models have always struggled
schedule and structure of repayment, so
to underwrite. The International Finance
they are friendlier to cashflows and more
Corporation estimates that there are 65
responsive to fluctuations in earnings.
million formal micro-small and medium
“People don’t want a smaller mortgage.
enterprises in developing countries that
They want a way to finance housing in a
have unmet financing needs, a gap of $5.2
way that matches the way they earn their
trillion.75 In the US, the 2017 Small Busi-
income,” said Amolo Ng’weno, East Africa
ness Credit Survey (SBCS) fielded by 12
Regional Director at the Bankable Frontier
regional banks in the Federal Reserve Sys-
Associates. Innovations of longer-term
tem revealed that 53% of employer small
credit products could potentially open
businesses experience “financing short-
up asset ownership to a broader segment
fall”, i.e. the challenge of receiving financing
of workers in the future and could help
less than the amount they applied for and
reverse growing inequality.
needed.76 As more people turn to entrepre-
Stress associated with debt: 50% of re- neurship in the future of work, these gaps
spondents to our survey borrow from could widen. Innovations in crowdfunding,
friends/family or a financial institution peer-to-peer and online lending are begin-
when they don’t have enough income for ning to chip away at this gap by opening up
their expenses. Credit needs to be provi- new channels for obtaining capital. More-
sioned in a careful manner in the future. over, innovations in underwriting and re-
When income is variable, the credit need payment are also being introduced into the
is often for small amounts of money quite market. Alternative data, similar to what
frequently. Low income individuals often is being leveraged in the consumer credit
do not have access to affordable credit context, can unlock new insights into the
that meets this need. The energy, time, creditworthiness of a business.
and emotional toll of borrowing at high
cost seem to be a common phenomenon
around the world. According to Dr. Annie
“People don’t want a smaller
Harper at the Yale School of Medicine, lack
mortgage. They want a way to
of access to affordable, short-term, small
finance housing in a way that
scale credit can have adverse effects on
matches the way they earn their
people’s health. Products will need to be
income.” Amolo Ng’weno, BFA
created that can help to lower stress for
individuals if they are going to be needing

P. 40
IV. Financial management
With the increase in sources of income, enhanced volatility of income, and complexity of
a portfolio of income earning opportunities, the need for effective financial management
tools will be magnified in the future. “When income is variable, people are not as confi-
dent, even if some variability means more income,” said Carl Camden, former CEO of Kelly
Services and now Founder and President at IPSE-U.S., the Association of Independent
Workers.

Need for smart budgeting and planning:

A gig worker does not make a steady wage,
which makes calculating monthly income
and planning for expenses a serious chal-
lenge. This has been a constant reality for
informal labor in developing economies
and will be confronted by more and more
people in developed economies. Accord-
ing to our survey data, only 46% of small
business owners report making consistent
income each month, compared to 72% of
all survey respondents. Although most ex-
penses like food, shelter, communication,
transportation tend to be predictable on a
monthly basis, many people often lack the
tools to understand these expenses and
anticipate total expenditures. The combi-
nation of variable income, limited finan-
cial capabilities, and lack of insights into
expenses can make it challenging to man-
age and match steady expenses with un-
steady earning on a regular basis. Provid-
ers can help individuals identify trends in
income as well as how those trends relate
to steady expenses, which could help to re-
duce financial stress. A dashboard tool that
can indicate how many more hours of work
required to achieve a certain goal would be
very beneficial.
Intertwining of personal and business
accounts: Gina Harmon, CEO of Accion
US, states that “people choose business
“When income is variable, people are
not as confident, even if some variabil-
ity means more income.”
Carl Camden, IPSE-US
ownership, in part, because they see it as
a pathway to control their own financial
lives.” However, entrepreneurs and free-
lancers often face the challenge of organiz-
ing and aggregating their earnings in a sin-
gle easy-to-navigate platform. With more
people joining the ranks of freelancers and
business owners, retail financial services
may need to pay attention to the inter-
twining of individual and business financial
accounts. According to our survey data,
55% of small business owners reported
paying a bill late over the last 12 months, a
higher percentage than any other group we
studied. The current practice of separating
personal from business accounting may
benefit from rethinking to better serve
the needs of consumer-entrepreneurs.
Correctly calculating taxes is another chal-
lenge that will be magnified by the increase
in the number of independent workers and
entrepreneurs for whom consumption and
business taxes can be intermingled.

P. 41
New tools for government benefits: One vestments and automate them so that in-
other aspect of financial management that dividuals can more readily take advantage
may require reforms in light of the future of of them. Workers are no longer going to
work will be government benefits. If solu- necessarily be incrementally making more
tions like universal basic income (UBI) are money as they get older, and they will have
going to become a reality, financial services more gaps in earning capacity due to pe-
providers will need to understand these riodic breaks for the purpose of retooling
new income streams and help people man- and upskilling.
age them. In the US, earned income tax
Financial tools can engage people in invest-
credits (EITC) are disbursed as an annu-
ing early on could help to create a larger
alized return to low- to moderate-income
buffer that’s necessary for stagnant wages
working individuals and couples, but the
and/or gaps in earnings later on. Financial
annualized return does not match up with
planning and asset management has tradi-
the people’s liquidity needs. This is anoth-
tionally been services offered only to a se-
er instance in which retail financial services
lect set of wealthy clients. In addition, with
could link in with the government to devise
the younger generation expecting and de-
new tools and adjust the structure of EITC
manding digitally delivered, highly intuitive
to maximize households’ capacity to bud-
financial management tools, the financial
get and smooth consumption.77 The po-
services industry needs to fundamentally
tential expansion of government benefits
rethink the diverse market segments and
in light of the future of work will raise the
models for these services.
importance of tools that can help people
easily understand how their income might This reassessment should be centered on
impact their access to public benefits. the goal of helping customers to achieve
inclusive and sustainable financial health.
Investment as buffer: Financial manage-
ment tools have the potential to open up
investment opportunities for a new class
of workers. Dr. Annie Koh, professor of fi-
nance at the Singapore Management Uni-
versity argued that in the future, “people
will need to invest for themselves.” Tools
will need to be created that simplify in-

P. 42
Building Financial Health for the Future of Work
“More flexible work in the future is a market opportunity.
Freedom is an opportunity for everyone in the financial services
ecosystem.”
Alejandro Cosentino, Chief Executive Officer, Afluenta

Technology is going to fundamentally transform financial services in the next 20 years,

just as it is going to transform the world of work. That transformation, however, must
be focused on improving people’s financial health if we want to meet people’s needs in
the future. Otherwise we risk exacerbating the problem of inequality that is currently at
the center of nearly every politico-socio-economic challenge around the world. This is a
tremendous opportunity to reform financial services from top-to-bottom; a piecemeal
approach simply will not suffice for the future. This section provides recommendations on
how to reform every level of financial services.

I. Ecosystem
The modern financial services ecosystem dates back to the 1400s in Spain and Italy and
was designed to serve the needs of government officials and merchant groups. The eco-
system has evolved since that time, but it still sits on a core architecture that makes ser-
vices cheap for those who are wealthy and expensive for those who are poor. Moreover,
past excessive risk-taking behaviors and financial crises have led to an erosion of trust in
financial services. The unprecedented power of digital technology has the potential to
magnify or mend this trust gap. Building trust into the very center of reforms and innova-
tions will be absolutely critical.

i. Universal Financial Health

The future viability and success of the fi-
nancial services ecosystem hinges on its
ability to reform and innovate in response
to the new realities and needs that arise
with the future of work. Building custom-
ers financial health in this rapidly evolving
labor landscape will determine the level
of stability and growth potential in the fi-
nancial services ecosystem. Several expert
interviewees remarked that financial insti-
tutions have historically been motivated
and judged by their profits, return on eq-
uity, market share and client servicing. And
we may well be moving towards a world in
which financial intermediation needs to be
enriching for all parties to be sustainably
profitable into the next century, as more
clients will demand it.
It is hard to overstate the importance of
reorienting the financial services ecosys-
tem towards the goal of universal finan-

P. 43
cial health, which means instead of only
measuring how many people have opened
a payment account, financial institutions
must consider the outcomes and impacts
of all of the financial services that people
need and use to take control of their fi-
nancial lives. Financial health can lead to
increased economic opportunity, more re-
siliency against financial shocks, and social
mobility.

Overcoming challenges with access is only

the first step towards achieving universal
financial health. There are nearly 1 billion
people without a formal identity docu-
ment, 1.7 billion people without a financial
account, and 2.5 billion without a mobile
connection, and over 3 billion without ac-
cess to the Internet.78 “Identity manage-
ment is the foundation upon which finan-
cial innovations can be created,” said Hala
Zahran of Arab Bank. A financially healthy
and inclusive world does indeed require
unique IDs, and technology is rapidly help-
ing to chip away at some of the barriers that
are traditionally associated with identity
management in financial services, such as transfers, and are central to risk sharing
physical proximity, information asymme- and consumption smoothing strategies for
try and commercial viability. Internet and households in the face of shocks.80 Anoth-
mobile connections will continue to be the er study finds that M-PESA users are more
gateway for people to open up financial ac- likely to transact for regular support, cred-
counts in the future, but it is important to it, and insurance purposes, enjoying more
note that there are still far too many in the options for managing their financial lives.81
world without connectivity. Once access is
Between 2011 and 2017, over 1 billion peo-
provided through digital technology the
ple had newly created transaction ac-
impact can be tremendous. A panel survey
counts.82 We may fall short of the World
conducted in 2014 found that better ac-
Bank’s goal of universal financial access by
cess to M-PESA increased household con-
2020, but we have certainly made strides
sumption and savings, thereby reducing
towards the goal. The challenge at hand
poverty rates by two percentage points.79
is shifting to how to improve and create
Mobile money transfers have been shown
services that are useful to people who
to reduce the transaction costs of financial

P. 44
 With such close alignment between
the financial health of customers
and commercial success of the
financial services providers, reforms
and innovations of all levels should
start from and reflect a reorienta-
tion towards the goal of universal
financial health.
now have these financial accounts. In In-
dia, for example, despite a significant rise
in the number of bank accounts over the
past several years, nearly half of these ac-
counts lay dormant according to the World
Bank. A survey commissioned by PayPal in
2016 found that nine out of 10 consumers
in Brazil, India and the US report having a
bank account, but still feel underserved by
the current financial system. The future of
work provides an incredible opportunity to
provide useful financial services to many
of the newly banked, and the underserved,
around the world.
Solving for financial health and the chal-
lenges that arise with the future of work is
an important business opportunity for the
financial services industry at this unique
historical moment – as industrial econo-
mies mirror developing economies, with a
growing portion of the labor market move
from doing “steady jobs” to undertaking
a “portfolio of opportunities.” Contrary to
widely held assumptions, the poor are will-
ing to pay for financial solutions that serve
their needs. For example, sometimes the
poor will deliberately choose a more ex-
pensive moneylender because the looser
repayment schedule fits their needs bet-
ter. Instead of receiving interests on bank
deposits, they might even pay fees to use
a good savings product.83 Improving their
financial health with high quality products
and services ought to be the foundation
on which institutions within the financial
services ecosystem differentiate. The basis
and potential of profitability will be defined
by features such as reliability, security, con-
venience, and affordability. With such close
alignment between the financial health of
customers and commercial success of the
financial services providers, reforms and
innovations of all levels should start from
and reflect a reorientation towards the
goal of universal financial health.
Moreover, the ambition of universal fi-
nancial health will require much broader
collaboration across the financial services
ecosystem and public-private partner-
ships. Indeed, a commitment to univer-
sal financial health may require revisiting
the norms and rules the ecosystem oper-
ates by. Moreover, there is an opportunity
for both the public and private sectors to
come together around the commitment of
universal financial health, just as the sec-
tors committed to universal financial in-
clusion before. Since 2010, more than 55
countries have made commitments to fi-
nancial inclusion, and more than 30 have
either launched or are developing a nation-
al strategy. World Bank research indicates
that when countries institute a national
financial inclusion strategy, they increase
the pace and impact of reforms. Now is the
time for a renewed focus on universal fi-
nancial health across the financial services
ecosystem.
P. 45
 ii. Reestablish Trust
Financial services providers reached his-
toric lows in trust following the 2008 finan-
cial crisis. In 2007, trust in banks, according
to the Edelman Trust Barometer, was 68%,
but it fell well below 50% after the crisis.
Although an overall recovery to above 60%
can be seen in the last couple of years, fi-
nancial services remain one of the least
trusted industries.84 This recent stalled
recovery in trust is fragile and could be
rapidly lost, if technology is not leveraged
properly to meet the needs of individuals
and businesses in the future. As technol-
ogy becomes and continues to be the pri-
mary vehicle through which workers are
paid and how they manage their financial
lives, there will be serious concerns about
transparency, privacy, security, bias, and
stability that will need to be addressed. All
of these issues strike at trust, the core of
the financial technology ecosystem.
Privacy will become an increasingly im-
portant issue in the future as workers need
to engage in a multitude of work contracts
with multiple providers. Systems and pro-
tocols must be created to ensure that
sensitive financial data is kept private. Ac-
cording to a survey conducted by Pricewa-
terhouseCoopers, only 25% of respondents
believe most companies handle their sen-
sitive personal data responsibly, and only
10% of them feel they have complete con-
trol over their personal information. More-
over, 71% of them find companies’ priva-
cy rules difficult to understand, and 71%
would stop doing business with a company
for giving away their sensitive data with-
out permission.85 As systems begin to pull
together financial data from various pro-
viders for different use cases and combine
them with other uniquely personal data
sets (i.e. healthcare, employment), con-
cerns around data privacy will multiply.
While financial institutions stand to gain
from breakthroughs that are catalyzed by
data sharing, there are inherent risks asso-
ciated with integrating systems for data ac-
cess. If data sharing is done well, it has the
potential to enhance know-your-custom-
er, identity validation, and fraud detection
capabilities.86 In order to harness the pow-
er of data and technology and build a path
to trust simultaneously, financial services
providers must be transparent, thought-
ful and careful with how information is ac-
cessed, collected, stored, used, and shared.
The need to strengthen cybersecurity will
also increase, as financial data about work-
ers is shared with a host of providers and
customers who will be managing important
data streams. Encryption will likely contin-
ue to improve but adding more actors to
the ecosystem will heighten cybersecurity
risks exponentially. There are centraliza-
tion risks for customers storing their data
in a handful of large-scale identity, verifi-
P. 46
cation, and financial services data fortress-
es. The most serious cybersecurity risks,
such as data breaches, credential theft,
and credential reuse/abuse, can cause tan-
gible harms and undermine trust for the
entire ecosystem. EY’s 21th Global Infor-
mation Survey captured responses from
over 1400 C-suite global leaders in 2018
and found that only 8% of organizations
reported having the information security
functions that fully meet their needs.87 A
Deloitte study finds that institutions that
have reached the highest implementation
tier in the National Institute of Standards
and Technology (NIST) framework are
companies where accountability for cy-
bersecurity starts at the top, responsibil-
ities are shared across functions, multiple
lines of defense are maintained, and cyber
risk exposure is distributed and insured
against.88 Beyond improving solutions such
as multifactor authentication and tokeni-
zation, financial services providers need
to continuously improve ecosystem-wide
risk management infrastructure and adopt
best adaptive practices to lower cyberse-
curity risks, build cyber resilience, and im-
prove the digital literacy and cyber hygiene
of customers.
Platforms and marketplaces have a social
and cultural dimension that can make it
hard for certain groups to break in as pro-
viders in these markets, not to mention
access to connectivity as a first order en-
try barrier. The financial services ecosys-
tem needs to make concerted efforts at
removing biases that may have been pre-
built into financial services in order to es-
tablish and strengthen fairness as a basis
of trust. Ideally technology and data can be
leveraged to deliver objective analytics and
decisions that bring us closer to a world of
equal opportunity, but there are also real
risks for technology to amplify and scale
discriminatory biases if underserved pop-
ulations are poorly or under- represented
in a data set that is used to train an al-
gorithm, or if biases are encoded into the
training data and algorithm. The full po-
tential of financial technology will only be
realized if biases are eliminated to enable
fair outcomes. If algorithms that replace
loan officers and mortgage brokers are to
be trusted, they ought to be free from par-
tiality and prejudice.
The financial instability and insecurity
caused by the financial crisis in 2008 is one
of the major reasons that there’s a trust
deficit in the financial system globally.
Technology can help to introduce competi-
tion into the financial services market and
therefore reduce systemic risk. Moreover,
financial technology solutions are current-
ly being integrated with existing financial
institutions and lack the scale to pose ma-
jor unique financial stability risks. But the
situation may well be different in 20 years.
To the extent that the model for deliver-
ing financial services and products remains
similar, then technological advancements
may inadvertently magnify some of the
stability risks (i.e. overleveraging of credit)
that have traditionally been at the center
of financial services, by making the delivery
of those services faster than the system
can handle. This could lead to a challenge
for regulators and policymakers to keep up
with the speed with which technology is in-
novating and raising inherent risks. Again,
reforming financial services at its core to
P. 47
focus in on financial health could help to
allay, at least in part, this concern.
If individuals do not trust financial tech-
nology, then all of the tremendous poten-
tial for product innovation and financial
empowerment are moot. The financial
ecosystem must tackle this issue head
on and establish the highest standards
for data stewardship with a strong ethical
framework. “People need to stop mov-
ing fast and breaking things,” said Wayne
Hennessy-Barrett of 4G Capital, a fin-
tech upstart operating across Africa. Alex
Fankuchen of Tala echoed the sentiment
and emphasized that “financial services
providers will need to get it right the first
“Financial services providers will
need to get it right the first time
when working with customers so
that they can maintain and build
trust in their services. If new tech-
nology doesn’t take the time to
establish itself as a trustworthy
and reliable solution, that’s it.”
Alex Fankuchen, Tala
time when working with customers so that
they can maintain and build trust in their
services. If new technology doesn’t take
the time to establish itself as a trustworthy
and reliable solution, that’s it.”
P. 48
II. Institutions
Financial technology has brought a wave of new actors into the financial services eco-
system over the past few years. Both traditional and new institutions have an opportu-
nity to reimagine and fundamentally adjust their approach to financial services in light
of the changing nature of work and income. As we take a portfolio view towards income
earning opportunities, it may be helpful to adopt the same portfolio view towards peo-
ple’s multi-faceted financial needs as the institutional basis for innovation. The following
recommendations reflect best practices learned from leaders from financial institutions
around the world.

i. People over Products

Leaders of several technology startups
that we interviewed for this research proj-
ect mentioned that their greatest strength
was not in their technology solutions per
se, but rather in their ability to truly un-
derstand the needs of their customers.
Quinten Farmer, Chief Operating Officer
of fintech startup Even acknowledged that
his company uses “new forms of data mod-
eling and machine learning” but pointed to
“deep member research” as the core differ-
entiating factor behind the company’s rap-
id rise. A deep understanding of custom-
ers is what allows the company to deploy
these new technologies effectively. Tech-
nology enables a provider to offer products
with an unprecedented level and combina-
tion of personalization and standardization
at scale, precisely as more people are going Financial services providers would be well-
to be living less standardized lives in the served by recruiting individuals and busi-
future. Thus, being able to understand the nesses that have variable income streams
commonalities and the individualized dif- and that have struggled financially in the
ferences in people will be key to success in process of designing new products and ser-
the future. Focusing on people over prod- vices. People who are not underserved by
ucts as institutions will have significant the existing financial system might strug-
implications on the company strategy, gle to truly understand the needs of those
process, structure and culture, including who would benefit most from product in-
whether and how human-centered design novation. Individuals who have dealt with
and innovation takes place. first hand some of the major changes and

P. 49
challenges associated with the future of
work trends described above will be able
to inject deep empathy and personal un-
derstanding into the process and culture
through which financial institutions plan
and implement reforms that will be neces-
sary in the future.
Many of the future of work experts we
spoke with suggested financial literacy
as a silver bullet to some of the challeng-
es posed by the future of work. However,
almost none of the financial services ex-
perts we spoke with agreed. As Peter Ker-
stens from the European Commission put
it, “Quite a lot of folks who have financial
literacy still behave in irresponsible ways.”
Instead, financial services experts pointed
to the need for more tailored and precise
financial services that take into account
the real world needs of real people, rather
than creating products before understand-
ing the customers.
Financial services providers may need to
reimagine their approach to product de-
sign to meet people’s needs rather than
pigeonholing them into preexisting prod-
uct categories. Kate Griffin from Prosperity
Now remarked that “savings and credit are
essentially doing the same thing: giving you
an ability to get a lump sum of money that
you don’t currently have – one leveraging
past income and the other future income.
But we tend to keep savings and credit
product people separate, so it is challeng-
ing to design for the right solution for the
need in that particular moment in time. I
have seen some banks try to break down
some of these barriers; financial institu-
tions need to start thinking differently.”
There is a wealth of research showing how
people who are poor and underserved by
the formal financial system, don’t tend to
choose between alternative instruments
but instead maximize access to both sav-
ings and credit, since neither fits their
needs perfectly and their strategy is to
patch together a portfolio of general-pur-
pose liquidity tools.89 As we move into a
new world where more and more people
experience income volatility, uncertainty,
and insecurity, financial institutions need
to rethink how to best structure its organi-
zation to best facilitate teams to solve for
customers’ financial needs holistically, and
deliver products that will truly advance fi-
nancial health.
Financial services providers may
need to reimagine their approach
to product design to meet people’s
needs rather than pigeonholing them
into preexisting product categories.
A deep understanding of customer needs
may also open up new possibilities in how
financial institutions approach different
contexts and markets. For example, 64%
of respondents to our survey with variable
income said they prefer to receive income
from work more frequently, whereas only
44% of those with consistent incomes pre-
ferred more frequent access to their mon-
ey. Also, embedding a high-touch approach
into high-tech products can enable the ad-
aptation and creation of more culturally
relevant financial services. Our survey data
suggest clear differences across markets
and regions. Survey respondents in emerg-
ing economies, i.e. Brazil, China, or India,
are 123% more likely to be able to cover 6
or more months of expenses with savings,
P. 50
if they lost their main source of income,
holding everything else constant. Knowing
whether a society has traditionally over- or
undersaved could help to design a prod-
uct that better steers savings behavior to
build financial resilience for a world with in-
creased job churn, less of government and/
or employer safety nets, and more person-
al responsibilities. Also, our survey results
seem to indicate a greater openness to us-
ing new fintech tools in emerging econo-
mies. Survey respondents in Brazil, China,
and India are 54.5% more likely to prefer
receiving income from work via digital pay-
ment apps.
A deeper focus on people may enable more
granular customer segmentation and also
personalization. Currently financial institu-
tions tend to offer a basic suite of products
that are not very well tailored to individual
needs. Putting people at the center of the
ii. Get the Full Story
There needs to be a fundamental change
in the way in which financial services seek
to understand their customers. Current-
ly, financial institutions secure some basic
data elements from a customer in order to
sign up for an account and will then gather
up more data about the customer as the
customer uses the provider’s products.
Developing a more holistic understanding
of customers’ financial life could lead to
more effective solutions that better meet
customer needs and help create more sat-
isfying user experiences. Moreover, finan-
cial products are currently offered in silos
and fail to take into account the full picture
“If fintech is just about getting a
nicer app, then we are missing the
opportunity.” Frederic de Maris, UBS
institutions focus will also build in a notion
of ethics into the individual products that
are created. Francisco Mardones, President
of ChileTec and CEO of Mentor Graphics in
Chile, challenged financial services to think
of themselves more as an “adviser” to peo-
ple rather than as a transactional provider.
By placing the primary focus on people over
products, financial institutions can deliver
products that are far more accessible, user
friendly, and that truly leverage the power
of technology to improve the lives of cus-
tomers. As Frederic de Mariz from UBS put
it, “If fintech is just about getting a nicer
app, then we are missing the opportunity.”
that contains important information about
underlying and even unarticulated needs.
As more people turn to independent work
and entrepreneurship, financial institu-
tions will have to understand all of these
separate traditional accounts through a
unified system. Moreover, financial in-
stitutions must help people understand
which of their assets might have finan-
cial value (i.e. space, physical objects, ar-
able land, and data) and how they could
be effectively and maximally leveraged for
short-term or long-term monetary value.
Dr. Robert Wolcott, Clinical Professor of
P. 51
Innovation and Entrepreneurship at the
Kellogg School of Management, North-
western University noted that financial
institutions could also help advise people
on issues such as corporate structure and
government programs based upon the way
they are working so that they might take
advantage of available incentives or tax
deductions. This could be a beneficial ser-
vice as more individuals in the future will
be earning an income through platforms
or entrepreneurship. Financial institutions
must also start to understand the unique
financial challenges that their customers
might have even though they might be
generating higher income overall. For ex-
ample, 51% of respondents to our survey in
the online platform economy have paid a
bill late and incurred fees over the past 12
months, compared to 38% of people who
do not participate in the online platform
economy.
51% of respondents in the online platform
economy have paid a bill late and incurred
fees, compared to 38% of people who do not
participate in the online platform economy.
In recent years, open banking has become
a tremendous area of focus for financial
regulators around the world. Open bank-
ing can be defined as a collaborative model
in which data flows through the intelligent
conduit of application programming inter-
faces (APIs) between two or more unaffil-
iated parties.90 The notion that banks can
and should open up their data to non-bank
financial services providers is an important
innovation that will enable non-bank pro-
viders to provision more efficient, accurate,
and effective products. However, securing
data about banking behavior is just a first
step in better understanding a consumer
or business’ full financial life.
Data could also be culled from HR provid-
ers, platforms, and professional networks to
enable better provisioning of financial ser-
vices. Understanding when a person might
be receiving a bonus or might be heading
into a bear month based on data from an
employer or platform would be incredibly
helpful in financial planning, as is already
incorporated into the services offered by
Nudge in the UK.91 Piecing together infor-
mation about individuals’ work across gig
platforms and how that compares to oth-
ers could also prove very valuable for fi-
nancial health. Übank, a fintech startup in
Mexico, has been building integrations with
multiple gig economy companies, so their
drivers and delivery partners can allocate
a percentage of each completed ride and/
or delivery towards savings.92 Honest Dol-
lar, a fintech startup in the US, has a very
similar arrangement with transportation
platform Lyft.93 A fuller picture of relation-
ships and transactions with the employers
and/or the platforms of a given customer
P. 52
will also be helpful in underwriting; if the
platform is growing then the opportunity
for wage growth for the individual may also
grow. Professional network platforms con-
tain valuable information about an individ-
ual’s skills and prospects that could help a
financial services provider to better predict
income and credit worthiness in the future.
Interoperability is going to be key to achiev-
ing the goal of putting together disparate
fragments to paint the full financial picture
of an individual. An open and interoperable
system can mitigate or even remove the
friction of moving data across previous-
ly siloed systems and enable dissimilar or
previously disconnected financial institu-
tions that are provisioning different ser-
vices to share information such that better
financial decisions can be made. Linking
in with government systems about iden-
tity, benefits, and government payments
could enable far more intelligent financial
services provisioning. Data about govern-
ment loans for education that people have
secured would also be a highly useful data
point in future lending decisions. Social and
behavioral data can also be analyzed to
help to create a more holistic financial pic-
ture of an individual or business. In addi-
tion, interoperability can mitigate against
concerns about concentration of data and
power.
Portability is also an important factor in
ensuring an open innovative environment
in the future for financial services. Custom-
ers should be able to choose the provider
that best meets their needs and easily port
their data over to a new provider. The con-
cept of portable benefits is becoming in-
creasingly important in the future of work
conversation, particularly with regards
to new models and packages of portable
benefits for independent workers, which
are good reasons for financial services to
engage and evolve in response to the de-
mand for greater portability.
Interoperability is going to be key
to achieving the goal of putting
together disparate fragments to
paint the full financial picture of an
individual.
If financial institutions adopt this holistic
approach, possibilities of many new in-
novations will follow. Seeing and under-
standing a fuller picture of an individual or
business’ life and financial needs will form
the foundation for intelligent and flexible
product designs (discussed further in the
next section). For example, an interoper-
able open system can enable financial in-
stitutions to help anticipate changes in in-
come as well as maximize existing income.
It will also help people to take advantage of
government and non-government benefit
programs that could help fill certain gaps
P. 53
III. Products
Traditional financial products were largely developed for a world where individuals worked
a handful of jobs with steady income over the course of their lives. Credit scoring algo-
rithms were based upon that single source of steady income. Savings programs were set-
up to match a bi-weekly paycheck. Financial management was relatively straightforward
as a steady income that was likely to increase as a person aged and could be matched
with steady expenses. Financial services providers can no longer hold these simplistic as-
sumptions about how people will be earning incomes in the future. In addition to being
secure, convenient, reliable, transparent, and affordable, financial products will need to be
far more flexible and intelligent to help manage some of the complexity and volatility that
are likely to come in the future of work.

i. Flexibility

“Workers want flexibility in how they do their work, when they

do their work, and probably flexibility in terms of how they earn
their money.”
John Scott, Pew Charitable Trusts

When people move from one job to an-
other, they don’t want to have to set up a
new financial services solution; they want
it to be a seamless transition. Alexia Lator-
tua of the European Bank of Reconstruc-
tion argued that individuals in the future
will choose financial services that provide
“movement, flexibility, and a decent price
point.” People are going to need a platform
through which they can add, subtract,
and rearrange income earning opportu-
nities, match those with expenses (both
short- and long-term) in order to easily
understand their net savings or overages.
Advances on future earnings is another ex-
ample of a product that enhances flexibili-
ty by enabling an individual to handle a fi-
nancial shock without dipping into savings
or utilizing credit.
Jake Kendall from Caribou Digital raised
the importance of a “phone number for fi-
nance” in the future because payments will
be flowing in from so many different sourc-
es and being able to easily secure payments
regardless of the location or payment type
being used by the payer will be key. As more
people move into cities in order to secure a
good job and pursue economic mobility, a
new product like a migration loan could be
highly beneficial in emerging markets such
as India.94
A major application of flexibility will be
creating more tailored and micro versions
of traditional financial services that can
be reconciled with people’s variable cash-
flows. Micro-loans can now be provisioned
simply using information from a mobile
phone and can be provisioned directly to

P. 54

the mobile device for immediate use. Solu-
tions that round up purchases to enable
micro-savings for retirement, can expand
into variations that also enable access to
those funds at various time horizons will
become increasingly critical. Micro-in-
surance is also growing in importance as
workers are in need of short-term insur-
ance for their assets while being leveraged
for monetary gain, when they have to trav-
el for work, or in order to smooth gaps in
income. These flexible insurance products
enable someone to take advantage of them
only when they are needed. Many emerg-
ing economies are leapfrogging directly
to micro-financial services transmission.
As Selorm Adadevoh, CEO of MTN Ghana
put it, “People need bite-sized solutions. I
think about how a local ketchup company
beat the world’s leading ketchup producer
in an emerging market because it offered
individual packets instead of bottles, and
this is what people needed.”
Technology can help enable flexible ways
to structure products that simply weren’t
ii. Intelligence
There will be an expectation in the future
that digital financial services will be able to
deliver the same or higher quality custom-
er service and experience as in-person vis-
its do today. Delivering the right product at
the right time is really where intelligence is
greatly needed. When a worker in the fu-
ture has a very high paying month, service
providers must be able to understand that
this income stream is higher than normal
“People need bite-sized solutions.
I think about how a local ketchup
company beat the world’s leading
ketchup producer in an emerging
market because it offered individual
packets instead of bottles, and this
is what people needed.”
Selorm Adadevoh, MTN Ghana
possible in the past. Credit products that
don’t have fixed monthly repayment
schedules are likely to be far more neces-
sary and effective for the increasing num-
ber of workers whose income sources are
multiple, variable, and unpredictable. Also,
digital social networks can be leveraged to
provide community-based savings tools
where savings can be shared easily and
transparently between family members
and communities to help cope with bare
periods. Flexible and helpful variations of
RoSCAs (rotating savings and credit asso-
ciations) and ASCAs (accumulating savings
and credit associations) may also be more
easily facilitated by technology.
and thereby encourage the customer to
store some of that income away for a po-
tential future shock or towards achieving a
longer-term financial goal.
Integrating with HR providers could en-
able financial services to better under-
stand income streams and benefits, which
would enable far better loan underwriting.
Deductions that people get in a paycheck
could help a financial services provider
P. 55
determine consumption smoothing and
credit needs. Fiona Greig from the JP Mor-
gan Chase Institute described the concept
of a “smart paycheck” where an employer
or financial services provider could deter-
mine how the paycheck compares to previ-
ous paycheck amounts, payroll deductions,
and specific expenses. Adjustments could
be made to the paycheck to pre-allocate
savings or advance funds on money that is
going to be earned.

Smart and adaptive budgeting tools that

can make recommendations on how to
control certain expenses or earn certain
forms of income to bridge liquidity gaps
could become more viable with enhanced
data aggregation and analytics.

Sophisticated and intelligent algorithms

must be built to understand exceptions
that exist in the real world, which might
mitigate the typical recommendation that
would be given. As Jennifer Tescher, CEO
of the Center for Financial Services Inno-
vation put it, “Stuff happens, and the ma-
chine must understand that a flat tire can
happen. It is tough to train a machine on
this type of event because it is the excep-
money as soon as they have it, while others
tion and not the rule.” Leveraging and op-
try to squirrel money away for larger pur-
timizing the combination of intelligence to
chases or rainy days. Nuanced understand-
anticipate shocks and flexibility to manage
ing around preferences, standards, habits
shocks is the new sweet spot that could
and attitudes towards saving, spending,
yield a far more beneficial financial services
credit, and risk, across generational and
product suite in the future.
socioeconomic lines, can be deployed into
Intelligent designs can also help to identify powerful services that offer the right prod-
individual, social, and cultural differences uct at the right time in the future.
that might impact how financial decisions
This rise in automation of financial services
are made. Certain societies have a history
can leave customers feeling a bit power-
of high savings, whereas others have a his-
less, and that is why building transparency,
tory of low savings. Some individuals spend
and the ability to choose, control and cus-

P. 56
tomize into automated services is incredi- machine learning could improve nudges
bly important. Providing the right informa- that yield better outcomes for people.
tion at the right time can help a customer
An intelligent product suite is also one that
stay engaged and make the right choice
overcomes the current challenge of solving
of financial product. Moreover, learnings
many discrete problems in a largely siloed
from behavioral economics can be lever-
fashion. One can now obtain a tailored
aged to nudge consumers towards choices
credit product, a personalized payment
and behaviors that yield more financially
product, and intuitive savings product all
healthy outcomes. An interesting example
at low cost and through technology. How-
of the power of default options and choice
ever, none of these product providers talk
architecture comes from retirement sav-
to one another, leverage data from one an-
ings, where the 401(K) product only began
other, or help a user decide which product
to gain real tractions when individual em-
is actually best for his or her short term
ployees were automatically opted into the
and long-term financial situation. “Chronic
product (with the ability to opt out) rather
financial illnesses have multiple drivers and
than having to opt in themselves. There is
require solutions tailored to each customer
a growing body of evidence on the effec-
use case that directly address the underly-
tiveness of nudges, commitment devices,
ing structural and behavioral drivers,” said
and other applications of behavioral eco-
Mohamed Khalil, General Manager of Dig-
nomics. For example, reminder messages
ital Banking at the Commonwealth Bank
that mention both savings goals and fi-
of Australia. “Intelligent, evidence-based
nancial incentives can effectively increase
tools thoughtfully designed for how hu-
commitment attainment for clients who
mans actually behave should help people
recently opened commitment savings ac-
understand where they are in their finan-
counts, whereas gain versus loss framing
cial lives, help them make better tradeoffs
also have similar effects.95 For new long-
and choices with regards to their financial
term savings products that will be de-
goals, and then match them with a system
signed for a world of increased job churn
and income volatility, it must be designed of products and experiences that drive
meaningful, measurable outcomes.”
with nudges towards positive financial
behaviors such as long-term saving. Re-
gardless of varying levels of financial edu-
cation, intelligent nudges can push people Regardless of varying levels of
towards more financially healthy decisions, financial education, intelligent nudges
while also increasing their financial literacy can push people towards more
and enabling them to maintain control of financially healthy decisions, while
their financial lives. The balance between also increasing their financial literacy
flexibility and structure, between freedom and enabling them to maintain
and discipline, and between control and control of their financial lives.
automation, is not an easy one to strike,
but increased data aggregation and better

P. 57
Conclusion
Humans have long created economic value
and meaning through a portfolio of work
activities. The phenomenon of “steady
jobs” only emerged in the post-World War
II world, as companies in industrial econo-
mies placed new premium on stability and
long-term planning, and unions organized
to demand better work arrangements.96
While the practice spread to many devel-
oping economies, informal and indepen-
dent labor has persisted, and making a
living through multiple and uncertain gigs
has been an enduring reality for many, if
not most. Unsteady work is not unprece-
dented, but what is new and noteworthy
is the increasing portion of the labor mar-
ket losing steady jobs and returning to un-
steady work in industrial economies, con-
verging with developing economies. The
reversal presents an opportunity for retail
financial services around the world to re-
form and innovate for the goal of universal
financial health.

This report is an attempt to take a more holistic view on opportunities to reform and
adapt financial services in light of the changes that are likely to occur in the future of work.
We acknowledge that there are still many aspects of the future of work (e.g. the impact of
climate change, impact of changes in labor legislations, changes in the role of government
and/or corporations) that we have largely overlooked, and they will have a drastic impact
on the future.

We also acknowledge that reforming financial services is not a silver bullet that will resolve
all the challenges that arise with the future of work. As Dr. Chris Brummer, Director of
Georgetown University’s Institute of International Economic Law said, “Fintech at its best
can help to empower young people with information and tools with which they can trans-
form their income into wealth. But no fintech application will be able to help them build
wealth if they can’t get the jobs to create the income in the first place.” While financial
services cannot alter the social contracts that undergird the three pillars of government,
employer, and individual safety nets, it can provide options and improve people’s capacity
to manage their increasing share of financial responsibilities that shape their lives.

P. 58
What we are advocating is that when we
think about how to reform financial ser- We are going to be living in a world
vices, we do it in the light of the future of where technology is going to drive
work. It is imperative that leaders in the the future of work and the future of
private and public financial sector take financial services. But it is important
this more holistic approach, tying in learn- to remember that it will be hu- man
ings from a diversity of stakeholders and beings who will make choices about
sectors. It is only through cross-sectoral how technology is built and utilized.
partnerships and collaboration that we
can begin to tackle some of the enormous
challenges that we will face in the future. At PayPal, we are committed to a strategy fo-
cused on partnership that seeks to understand some of the unique needs that will be
posed by the future of work, and designing products that will meet those needs.

We are going to be living in a world where technology is going to drive the future of work
and the future of financial services. But it is important to remember that it will be human
beings who will make choices about how technology is built and utilized. If we fail to make
thoughtful and responsible choices in financial services that benefit people’s financial
health, then the challenges of the future of work may only be magnified.

We hope that this report will spark important conversations among leaders in the financial
sector about how to leverage technology to better understand the ways in which people
will be working and earning income in the future, and how financial solutions can build
better financial health outcomes for individuals, families, and communities around the
world.

P. 59
Appendix I. Acknowledgements
This research is part of a collaboration between PayPal Inc., the Center for Social Sector
Leadership, University of California at Berkeley, and the Centre for Public Policy, Indian In-
stitute of Management in Bangalore. The principal researchers and authors of this report
were Usman Ahmed and Ivy K. Lau from PayPal. Tyler Spalding, Matt Holton, Amrita Nair,
Paul Disselkoen, and Franz Paasche from PayPal were also instrumental for the success of
the overall research project. This research study also benefited from the guidance of Ben
Mangan, Executive Director and Lecturer at the Haas School of Business, University of Cal-
ifornia, Berkeley, and Pulak Ghosh, Professor of Decision Sciences at the Indian Institute
of Management in Bangalore. The survey research was conducted by Lilah Koski and Dan-
iel Koechlein of Logica Research. The survey analysis was supported by Simon Schropp,
Kornel Mahlstein, and Olim Laptiov of Sidley Austin. The report design was created by
Nadeem Mazen and Ehab Alatrebi of Nimblebot.

P. 60
Appendix II. List of Expert Interviewees
The following individuals were interviewed for this project. We are grateful for their insights,
which formed the basis for many of the findings in the report:

Name Organization Geography

Michele Chang Rework America Task Force, Markle Foundation US

Center for Technology Innovation, Brookings

Darrell West US
Institution
KH Moon Center for a Functioning Society, the
Richard Wartzman US
Drucker Institute
Daniel Runde & Romi-
Center for Strategic and International Studies US
na Bandura

Matt Homer United Nations Capital Development Fund US

Arun Sundararajan New York University’s Stern School of Business US

Vikrum Aiyer Postmates US

Dmitry Vishnyakov Nike, and formerly Visa Russia

Crawford School of Public Policy, Australian

Peter Whiteford Australia
National University

Benjamin Fernandes NALA Tanzania

Ida Radamacher Aspen Institute US

Jennifer Tescher Center for Financial Services Innovation US

Jennifer Van Dale Eversheds Sutherland Hong Kong

Amias Gerety QED Investors US

Matthew Blake World Economic Forum US

Tilman Ehrbeck &

Omidyar Network US
Arjuna Costa

P. 61
Rosita Najmi Bill & Melinda Gates Foundation US

Premal Shah Kiva.org US

Zia Qureshi Brookings Institution US

Momina Aijazuddin International Finance Corporation US

Ross Baird Village Capital US

Ruth Goodwin-Groen Better than Cash Alliance US

Greta Bull CGAP US

Brandee McHale Citi, and Citi Foundation US

Program for Recovery and Community Health,

Annie Harper US
Yale School of Medicine

Tammy Halevy Association for Enterprise Opportunity US

Melissa Koide FinRegLab US

Global Innovation Forum, and National Foreign

Jake Colvin US
Trade Council
Center for Financial Services Innovation, and
Corey Stone US
formerly Consumer Financial Protection Bureau

Katy Davis ideas42 US

Kate Griffin Prosperity Now US

Fiona Grieg JPMorgan Chase Institute US

Gina Harman Accion US

Carmen Rojas the Workers Lab US

Center for Household Financial Stability, Federal

Ray Boshara US
Reserve Bank of St. Louis

Micheal Masserman Lyft US

Phillip Kudakweashe
Samasource Kenya
Chikwiramakomo

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Dipak Basu Anudip Foundation India and US

David Dodwell HK-APEC Trade Policy Study Group Hong Kong

Bureau for Workers’ Activities (ACTRAV),

Michael Watt Switzerland
International Labour Organization

Rebecca Lentchner BNY Mellon Hong Kong

Rupa Ganguli Inclusive Trade UK

Michael Frank Economist Intelligence Unit Hong Kong

Shorooq Investments, Sarwa, and RentSher

Shane Shin UAE
Middle East
MTN Ghana, Digital Impact Alliance at the United
Selorm Adadevoh Nations Foundation, and Women’s World Banking Ghana
Ghana
Kenya,
Wayne Uganda,
4G Capital Group
Hennessy-Barrett Ghana,
Mauritius
Arab Bank, formerly World Economic Forum and
Hala Zahran Jordan
liwwa, Inc.

Jonas Hedman Copenhagen Business School Copenhagen

Monica Brand Engel Quona Capital US

Alex Fankuchen Tala US

Tim Perkins Nudge Uk

Mexico,
Afluenta S.A., Camara Argentina de Fintech, and Argentina,
Alejandro Cosentina
FinTech IberoAmérica Peru,
Colombia

Latin America
Laura Ripani Inter-American Development Bank and the
Caribbean

P. 63
Anil Kumar Gupta MicroSave India

Annie Koh Singapore Management University Singapore

Francisco Guzman Tala Mexico

Jake Kendall Caribou Digital France

Deepak Menon Village Capital India

Chen Chen Lee Singapore Institute of International Affairs Singapore

Amit Singh Uber US

Mijael Feldman Übank Mexico, Chile

Saadia Zahidi World Economic Forum Switzerland

Institute of International Economic Law,

Chris Brummer US
Georgetown University

Cher Pong Ng SkillsFuture Singapore Singapore

Mohamed Khalil Commonwealth Bank Australia

Frederic de Mariz UBS Brazil, and Columbia University Brazil

Shaun Dawson Devon Cresa UK

Hochschule Kaiserslautern, University of Applied

Juergen Bott Germany
Sciences

Karthik Sankaran Eurasia Group US

Heather Canon Elevate (previously Good World Solutions) US

Tia Hodges Citi Foundation US

Asif Faruque Level39 UK

Kay Turner US Department of Treasury US

Peter Kerstens European Commission Europe

P. 64
Andrew Charlton AlphaBeta Australia

Randy Shuken BizEquity, panOpen, and formerly Mastercard US

Qing Cao University of Illinois US

Aaditya Mattoo World Bank Group US

Adam Greene International Labour Organization Switzerland

Jin Feng Fudan University China

Appalachian Community Capital, Southern

Donna Gambrell US
Bancorp, Inc., Federal Reserve Bank of Atlanta

Quinten Farmer Even US

Snigdha Poonam Freelance journalist India

Bankable Frontier Associates Global, and U.S.

Daryl Collins US
Financial Diary

Amolo Ng’weno Bankable Frontier Associates Global Kenya

Albert Francis Park Hong Kong University of Science and Technology Hong Kong

Francisco Mardones ChileTec, and Mentor Graphics Chile

Tao Kong Peking University China

Adam Hemphill, Wel-

by Leaman & Gayatri Walmart US
Agnew

Martin Fleming IBM US

George Castineiras Formerly Prudential Financial US

Melissa Netram, Erik

Rettig, Bradford Wal- Intuit US
ton
Alexia Latortue & European Bank for Reconstruction and
UK
Kerrie Law Development

P. 65
Boris Batin ID Finance Spain

Alex Forrester Rising Tide Capital US

Ann Yom Steel American Chamber of Commerce in Singapore Singapore

Hollie Heikkinen iWorker Innovations US

Daniel Tsiddon Viola FinTech Fund, and Tel Aviv University Israel

Louis Hyman Institute for Workplace Studies, Cornell University US

Robert Patalano OECD Switzerland

Greg Medcraft OECD Australia

John Scott & Andrew

The Pew Charitable Trusts US
Blevins

Arjan Schutte Core Innovation Capital US

IPSE US - the Association of Independent

Carl Camden US
Workers, and formerly Kelly Services
Frankfurt School of Finance and Management,
Michael Klein Germany/US
and Johns Hopkins University

Nejira Nalic McCarrick Formerly MI-BOSPO Bosnia

Sharon Zhang ManpowerGroup China

Tamara Cook FSD Kenya Kenya

P. 66
Appendix III. Regression Analysis
Financial health is a complex matter, so we performed a multivariate logistic regression
analysis on our survey data to mathematically sort out how different factors impact people’s
financial lives. We analyzed data collected from surveying 8000 working age individuals
in 8 markets - Brazil, Canada, China, France, Germany, India, the United Kingdom, and
the United States. Regression results show the relationships between variables such as
participation in the platform economy and confidence in their ability to retire at a desired
age. We hypothesize that outcomes related to financial needs and health (dependent
variables), such as the likelihood of paying a bill late and incurring fees in the past 12
months, is a function of a set of independent variables, namely age, gender, education,
country, location, income level, number of earners in the household, and type(s) of work.

To better understand the impact of different independent variables, we undertook a

thought experiment and anchored the economic interpretations of the regression analysis
on the profile of an average worker we created – Sam. While the analysis is not exhaustive,
the following results from scenario simulations are statistically significant, and they reveal
interesting connections that warrant further attention and study.

Anchor Profile: Sam is a married 30-year-old female physical therapist with a mas-
ter’s degree and a full-time steady job at a hospital in a city in the US. She belongs
to a two-income household with above-median income.

Holding everything else constant, and based on a 90% confidence interval,

P. 67
 1. Dependent variable: Ability to cover all expenses
each month with current income

Probability More/ less likely

Sam 85%

If Sam lived in an emerging

93% 8.8%
economy (Brazil, China, or India)

If Sam were male 90% 6%

If Sam were an online platform

89% 4%
economy worker

If Sam were a Gen Xer 82% -4%

If Sam’s income was below-median 63% -26%

If Sam were the sole earner in the

76% -11%
household

2. Dependent variable: Likelihood of feeling a sense of

control over how much income is made each month

Probability More/ less likely

Sam 74%

If Sam lived in an emerging

84% 13.5%
economy (Brazil, China, or India)

If Sam were male 78% 6%

If Sam were an online platform

85% 16%
economy worker

If Sam were a small business owner 80% 8%

If Sam’s income was below-median 60% -19%

P. 68
3. Dependent variable: Likelihood of having paid a bill
late and incurred additional fees or interest as a
result in the past 12 months

Probability More/ less likely

Sam 43%

If Sam lived in an emerging

29% -33%
economy (Brazil, China, or India)
If Sam were an online platform
56% 29%
economy worker
If Sam's job was at high risk of
49% 13%
automation

If Sam were a small business owner 53% 22%

If Sam’s highest education

attainment was a high school 47% 9%
diploma

If Sam were a Gen Xer 38% -12%

If Sam’s income was below-median 45% 5%

If Sam were the sole earner in the

45% 4%
household

P. 69
4. Dependent variable: Likelihood of making consistent
income each month

Probability More/ less likely

Sam 84%

If Sam lived in an emerging

75% -10%
economy (Brazil, China, or India)
If Sam were an independent con-
40% -53%
tractor
If Sam’s job was at high risk of
77% -8%
automation

If Sam were a small business owner 61% -27%

If Sam’s income was below-median 80% -4%

5. Dependent variable: Ability to cover 3 or more months of

expenses with savings, if main source of income is lost

Probability More/ less likely

Sam 51%

If Sam lived in an emerging

83% 62.7%
economy (Brazil, China, or India)

If Sam were male 62% 22%

If Sam were an online platform

57% 12%
economy worker

If Sam were a small business owner 59% 15%

If Sam lived in a rural area 39% -25%

If Sam’s highest education

attainment was a high school 46% -10%
diploma

If Sam’s income was below-median 28% -46%

If Sam were the sole earner in the

48% -7%
household
P. 70
6. Dependent variable: Ability to cover 6 or more months
of expenses with savings, if main source of income is lost

Probability More/ less likely

Sam 28%

If Sam lived in an emerging

62% 123%
economy (Brazil, China, or India)

If Sam were male 36% 30%

If Sam’s job was at high risk of

24% -15%
automation

If Sam lived in a rural area 23% -17%

If Sam’s highest education

attainment was a high school 23% -17%
diploma

If Sam were a Gen Xer 32% 13%

If Sam’s income was below-median 16% -43%

If Sam were the sole earner in the

28% -1%
household

P. 71
7. Dependent variable: Likelihood of below-median savings

Probability More/ less likely

Sam 47%

If Sam lived in an emerging

42% -10.6%
economy (Brazil, China, or India)

If Sam were male 35% -25%

If Sam were an online platform

39% -18%
economy worker
If Sam’s job was at high risk of auto-
51% 9%
mation

If Sam lived in a rural area 58% 23%

If Sam’s highest education

attainment was a high school 55% 18%
diploma

If Sam’s income was below-median 78% 66%

If Sam were the sole earner in the

58% 24%
household

P. 72
8. Dependent variable: Likelihood of remaining confident
about the ability to make the money needed each
month, if main source of income is lost

Probability More/ less likely

Sam 8%

If Sam lived in an emerging

13% 62.5%
economy (Brazil, China, or India)

If Sam were male 11% 31%

If Sam were an online platform

11% 27%
economy worker
If Sam’s job was at high risk of
7% -15%
automation

If Sam were a small business owner 11% 31%

If Sam’s income was below-median 6% -22%

9. Dependent variable: Likelihood of finding the ability to

manage all earnings and expenses in one place helpful

Probability More/ less likely

Sam 36%

If Sam lived in an emerging

47% 29.6%
economy (Brazil, China, or India)
If Sam were an online platform
39% 9%
economy worker

If Sam were a Gen Xer 31% -12%

P. 73
10. Dependent variable: Likelihood of thinking income
will be more predictable in the next 5 years

Probability More/ less likely

Sam 82%

If Sam lived in an emerging

75% -9.1%
economy (Brazil, China, or India)
If Sam were an online platform
88% 7%
economy worker

If Sam were a small business owner 88% 7%

If Sam were a Gen Xer 79% -4%

If Sam’s income was below-median 76% -8%

11. Dependent variable: Confidence in ability to re-

tire at desired age in the future

Probability More/ less likely

Sam 59%

If Sam lived in an emerging

76% 28.8%
economy (Brazil, China, or India)

If Sam were male 65% 10%

If Sam were an online platform

70% 18%
economy worker
If Sam’s job was at high risk of
55% -7%
automation

If Sam were a small business owner 68% 16%

If Sam’s income was below-median 43% -27%

P. 74
12. Dependent variable: Preference for receiving income from
work more frequently (i.e. daily, weekly, when I sell/produce
something, as soon as the work I do is complete”)

Probability More/ less likely

Sam 60%

If Sam were male 65% 9%

If Sam were an online platform

73% 21%
economy worker
If Sam was instead an independent
71% 18%
contractor
If Sam’s job was at high risk of
71% 17%
automation

If Sam were a small business owner 80% 33%

If Sam were a Gen Xer 52% -13%

13. Dependent variable: Preference for receiving

income from work via digital payment apps

Probability More/ less likely

Sam 22%

If Sam lived in an emerging

34% 54.5%
economy (Brazil, China, or India)

If Sam were male 26% 14%

If Sam were an online platform

32% 41%
economy worker
If Sam’s job was at high risk of
25% 12%
automation

If Sam were a Gen Xer 19% -16%

P. 75
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48 The World Bank, Year in Review: 2018 in 14 Charts (December 21, 2018)
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57 Sabbafh, Karim, Roman Friedrich, Bahjat El-Darwiche, Milind Singh, and Alex Koster. “Digitiza-
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58 Dhanah, Darlington. “Small Businesses and Job Creation in South Africa.” OpenUCT. December
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59 Knight, Rebecca. “How Freelancers Can Make Sure They Get Paid on Time.” Harvard Business
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60 Even. “Over 300,000 Walmart associates use the Even app.” Accessed January 03, 2019. https://
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61 Interview with Frederic de Mariz, UBS; Reuters. “Card transactions climb in Brazil as more abandon
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62 Alexandre Tanzi, U.S. Student Loan Debt Sets Record, Doubling Since Recession Bloomberg
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63 Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. 2018. The Global
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66 https://ilcuk.org.uk/images/uploads/publication-pdfs/ILC-UK_-_The_Global_Savings_Gap.pdf
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69 Marcks, Christine C., and John J. Kalamarides. “What Employers Lose in the Shift: From Defined
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71 Calculations based on data on percentage of population that saved for old age. https://globalfindex.
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72 Interview with Jonas Hedman Professor MSO,Department of Digitalization, Copenhagen Business
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73 Interview with Nejira Nalic McCarrirck, former director of MI-BOSPO in Bosnia
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76 Dudley, William C. “Equipped with Data to Empower Small Businesses – New York Fed – Medium.”
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77 Interview with Kate Griffin, Prosperity Now
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79 Suri, Tavneet. “Mobile Money.” Annual Review of Economics 2017. 9:497-520. Accessed January 03,
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83 Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. 2009. Portfolios of the
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85 PwC. “Consumer Intelligence Series: Protect.me.” PwC. Accessed January 09, 2019. https://www.
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86 Brodsky, Laura, and Liz Oakes. “Data Sharing and Open Banking.” McKinsey & Company. Septem-
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87 Ernst & Young. “Is Cybersecurity about More than Protection? EY Global Information Security
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89 Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. 2009. Portfolios of the
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90 Brodsky, Laura, and Liz Oakes. “Data Sharing and Open Banking.” McKinsey & Company. Septem-
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91 Nudge Global. “How Nudge Global Is Making Money Simpler for Employees.” Nudge Global. Ac-
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92 Interview with Mijael Feldman, CEO of Übank
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95 Karlan, Dean, Margaret Mcconnell, Sendhil Mullainathan, and Jonathan Zinman. “Getting to the
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96 Hyman, Louis. (2018). Temp: how American work, American business, and the American dream
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