More than half of financial institutions expect to have more gig-based employees over the next three to five years, according to a new report by PwC.
The report surveyed more than 500 financial services businesses globally, and received more than 60% of responses from C-suite leaders.
The report said that the upskilling of the workforce was a key element to improving productivity within the financial services sector. That includes better understanding of the workforce, embracing the platform economy and gig workers, and equipping employees with the right digital tools, specialist knowledge, and soft skills.
“Firms need new capabilities – both in-house and through outsourcing – as technology solutions increasingly involve collaboration with third parties,” PwC said.
While there is increasing access to on-demand talent, the survey found that most institutions still rely primarily on full-time and part-time employees. Contractors accounted for just 9% of the workforce among respondents, and gig-economy workers made up just 5%. PwC predicted that gig employees would likely perform 15% to 20% of the work at a typical institution within five years, driven by cost pressures and the need to access digitally skilled talent.
Crowdsourcing was also highlighted as a key contributor to improving productivity. Crowdsourcing has more than doubled since 2018, as cited by 50% of survey respondents, up from 21% in PwC’s previous survey. Eighty percent of respondents who used crowdsourcing believed in added “high value” to their organizations. That’s up from just 39% who felt it would add value in 2018.
“Leaders in the industry are looking seriously at their workforces to evaluate which roles need to be performed by permanent employees and which can be performed by gig-economy workers, contractors, or even crowd-sourced on a case-by-case basis,” said John Garvey, global financial services leader for PwC US. “COVID-19 and remote working have opened the door to accessing talent outside of a firm’s physical location, including outside of the country. What we are seeing now is a talent marketplace for gig workers in financial services, competing to take advantage of their specialist skillset and boost productivity within their businesses.”
“Gig economy workers also add value by immediately bringing the digital skills needed by financial services firms to improve functions such as customer experience and improving institutional resilience, while the full-time workforce is being upskilled,” said Nicole Wakefield, global financial services advisory leader for PwC Singapore.
However, obstacles remain for financial services firms looking to utilize gig work. The most common issues cited in the report included confidentiality concerns (44%), a lack of knowledge (43%), regulatory risk (42%), and overall risk avoidance (37%).
“Many of the most valuable companies in the world share one thing in common: they have embraced the platform economy as a business model,” Garvey said. “They operate with relatively few full-time employees, and an increasing percentage of gig-economy talent and skills that they can access on demand, making the organizations far more innovative, nimble, and cost-efficient.”