Financial Health & the Future of Work

A holistic approach to reform and adapt financial services worldwide.

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 markets. 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.

9 to 5
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 people 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:

A survey of 8,000 working age people from 8 different markets;


Over 100 interviews with experts on future of work and/or financial services;


Proprietary PayPal data.

The survey was fielded in Brazil, Canada, China, France, Germany, India, the United Kingdom, 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:

Machine Learning &
Artificial Intelligence

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 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.

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 respondents to our survey said they make a consistent income each month, compared to 72% of all survey 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.

• 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.

Real-time payments to platform economy workers through PayPal’s recently-acquired Hyperwallet platform have increased by more than 200% year-over-year.

• 51% of workers in the online platform economy in our survey dataset have 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.

• 63% of workers in the online platform economy in our survey dataset said they prefer to receive income from work more frequently.


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 ability to reach their financial goals, compared to 71% of male respondents.

• 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.


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.

Sam - a Case Study:

Opportunities for Innovations and Reforms


• Universal Financial Health: The future of work presents an important opportunity for financial sector deepening, in particular 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 transparency; and the ecosystem must lean in to provide that transparency. Technology also increases exposure and vulnerabilities related to data privacy, security, and dignity.

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 financial 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.


• 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 financial 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 development of new products that meet burgeoning needs in better ways.

• Get the Full Story: Financial services providers need to develop a holistic understanding of customers’ financial lives in order to develop more effective solutions. Workers in the future are going to have aP. 10 complex set of financial inflows and outflows. Open data within the financial services 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 innovation, empower the customer, and enhance economic opportunity is through interoperability and portability between financial 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.


• Flexibility: The nature of work going forward is going to be more flexible, so too will financial services need to flex to match the levels and timings of inflows and outflows 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-investments, and micro-insurance, which can help to overcome the many short-term uncertainties that are likely to become increasingly common in the future.

Enabling individuals to access payments in real-time, save small amounts from their paycheck, leverage future earnings for credit, and secure insurance to appropriately manage risks will greatly enable their future prosperity. Moreover, breaking longer-term savings and credit products into bite-sized pieces makes it more likely that individuals will engage with longer-term products in the future.

• Intelligence: The complexity of a financial life is going to increase due to the multitude of jobs and increased life expectancy. Future financial products need to understand variability in income streams, changes in expense flows, and significant moments in people’s life cycle. Simplified and integrated dashboards can help provide transparency and choice. Data should be leveraged to nudge people to positive long-term financial decisions and suggest the right product for the particular need at the right time. Enhanced intelligence can help to provision the kind of flexibility and structure that will be desired in the future, alongside the kind of stability that is needed.

People will need more tailored tools such as micro-payments, micro-savings, micro-credit, micro-investments, and micro-insurance