Lean: Banking the gig workers
Lean is offering a financial benefits ecosystem especially designed for gig workers. Tilak Joshi, its Founder and CEO, tells us more about the company and their offer.
Lean is offering a financial benefits ecosystem especially designed for gig workers. Tilak Joshi, its CEO, tells us more about the company and their offer.
How many gig workers are there in the United States and will their numbers increase?
This year alone, 36% of the American workforce participated in the gig economy. The gig economy is expanding three times faster than the total US workforce, and it is estimated to be the majority of the American workforce by 2027.
What is the situation of gig workers in the US? And what do traditional banks offer them?
Gig workers are in a compromised position financially – 60% are struggling to make ends meet, 35% are unbanked or underbanked, 25% don’t have any healthcare, and of those that do, nearly half can’t afford their deductibles. Traditional banks and financial systems built risk models decades ago, when the employment landscape was dominated by full-time salaried workers. The core tenets of older work patterns no longer apply, and as a result, modern risk models are outdated, lacking the data to support the rapidly growing gig segment. It’s no surprise to say traditional financial institutions, having spent half a decade working under these models, have not and cannot adapt fast enough to accommodate gig workers. Modern work patterns are defined by inconsistencies in hours, salaries and income, in support of individual flexibility. As a result of seeking a level of flexibility that legacy institutions do not understand, gig workers are forced to support their cash flow needs with predatory loans or pay high fees to receive access to financial tools from traditional banks.
Could you present Lean to us?
Lean builds financial products for the independent workforce. By directly partnering with gig marketplaces, Lean is able to leverage real-time, high-fidelity data to provide gig workers access to low-to-no-cost financial products and benefits that have historically been unavailable or unreasonably priced. This levels the playing field for these workers allowing them to have flexibility in how they work without compromising financial stability.
Prior to starting Lean, I spent about 15 years working across financial services and fintech, in product leadership roles at Citi, PayPal, and American Express, and a GM role as the Head of Mint, the largest personal financial management app. While at Mint, I discovered how quickly individuals are gravitating to gig work, the depth of challenges gig workers face, and the huge gap in the resources available to them.
With a relatively humble upbringing, having been able to identify with financial struggle, and a focus on setting the right example as I had kids of my own, I couldn’t ignore the gravity of struggle that plagued the gig economy. The decision to start Lean and tackle this problem head-on felt like the only option, grounded in an understanding and acknowledgement of who I am and what really matters to me. There is a natural alignment between some of what I saw through my upbringing and what many gig workers go through today.
Our mission is to unlock the financial system for independent workers, and level the playing field by enabling access to affordable capital, and alternative risk models that unlock access to mortgages, cheaper loans, income stability, and insurance. (Read the case study)
What do you offer to gig workers?
Lean partners with marketplaces to offer gig workers instant payouts, in milliseconds, after every gig, resulting in exponentially better cash flow for workers. In addition, by leveraging real-time data and aggregate insights, Lean provides access to up to $1,000 in advanced capital without the need to rely on traditional credit scores. Faster access to earnings and additional capital ensures workers’ needs can be met and any unexpected expenses won’t hold them back from financial stability.
For marketplaces, Lean takes on all the associated risk, compliance and support, allowing them to offer their workers increased benefits without the associated high costs. This leads to increased retention and acquisition in a highly competitive market.
The gig workers are generally considered as a risky clientele so it is very complicated or even impossible for them to obtain a loan or a mortgage. How do you offer these services to them?
It’s not so much that the ‘clientele’ is predominantly risky as much as it is a lack of understanding on how to measure risk for this clientele. Risk is a product of data and time. Through our direct partnerships with marketplaces, we have real-time, high-fidelity data that allows us a 360 degree view of gig economy workers. This enables us to accurately measure risk for this type of work. And what this has taught us is that the gig work segment is less risky than it is made out to be. Our perspective is that by taking a tailored, tactical approach to apply proper data, the complications are diminished to a palpable degree.
This aspect of our business is led by our co-founder, Eden Kfir, who, prior to Lean, built lending services for consumers in developing economies (Sub-Saharan Africa, as well as southeast Asia) that rely on a wider range of indicators to measure risk. This experience has informed Lean’s unique approach to risk management, which leverages a broader employment and behavioral dataset, opening the door for financial support to millions of gig workers.
What are your ambitions for Lean by 2030 and what are the main challenges you face to get there?
By 2030, we expect to be the financial ecosystem for the gig economy. We want to offer everything from instant payouts to lending, insurance and taxes, as well as access to more sophisticated products like mortgages. The primary challenge, and the most enjoyable part of building, is bringing people along on the journey. To fundamentally shift how the gig economy operates, it requires everyone from employers, to workers, to financial institutions, to come along on the ride with us. And if our journey thus far is any indication, the predominant majority is aligned with the vision. We’re on our way!
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