Artificial intelligence (AI) has rapidly transformed industries, and one of its most notable impacts has been on the gig economy. Platforms like Uber and Deliveroo use AI to automate work allocation, scheduling, and performance evaluations. While these advancements offer flexibility and new job opportunities, they also present challenges around worker rights, employment classifications, and regulatory oversight—challenges that hold significant lessons for the financial services industry and RegTech companies like Corlytics.
AI in the Gig Economy: Regulatory Implications
In my research on labour digitisation, I examined how AI-driven platforms in the gig economy influence worker-client matching and task management, fundamentally altering the nature of employment. Workers are often misclassified as independent contractors, a designation that denies them access to basic employment rights like health benefits and fair wages. This misclassification introduces regulatory complications that mirror broader challenges faced in industries where AI disrupts traditional frameworks, making it harder for laws and regulations to keep pace.
These same regulatory tensions are highly relevant to RegTech. Just as the gig economy needs updated regulations to protect workers, AI-driven compliance systems must also align with evolving legal standards. Transparency, fairness, and the ethical use of AI are critical, whether we’re talking about gig workers or regulatory compliance.
Applying Gig Economy Lessons to RegTech
At Corlytics, we develop AI-powered solutions to help financial institutions stay compliant with complex regulations. Interestingly, the AI-driven gig economy offers several lessons that can be applied to our work in compliance management:
- Transparency in AI Decision-Making
One of the major challenges in the gig economy is that AI algorithms often operate behind a veil of opacity, leading to outcomes that can be biased or difficult to understand. Similarly, AI in regulatory compliance must provide clear, explainable decisions that both financial institutions and regulators can understand and trust. At Corlytics, we prioritise transparency in our AI solutions, ensuring that decisions around compliance and risk are auditable and explainable. This helps build trust and facilitates smoother regulatory oversight.v - Navigating Regulatory Fragmentation
Gig economy workers face inconsistent protections and varying legal classifications across different regions. Financial services face similar challenges, as regulations differ significantly between jurisdictions. AI can help streamline compliance by consolidating and harmonising regulatory requirements across multiple regions. By leveraging AI, we can assist companies in managing this patchwork of rules more efficiently, simplifying global compliance strategies and ensuring consistency. - Addressing AI Bias
In the gig economy, workers are sometimes subject to biased ratings or discriminatory algorithms. The same risks exist in compliance systems, especially in areas like anti-money laundering (AML) or know-your-customer (KYC) processes. At Corlytics, we focus on developing AI solutions that actively mitigate these biases. Ensuring that financial services compliance is free from unintended discrimination is a priority, and AI models need to be carefully designed to ensure fairness and consistency across all decisions.
Ethical AI in RegTech: Learning from the Gig Economy
The need for ethical AI frameworks is a crucial lesson that the gig economy offers. Just as platforms need to ensure their AI respects worker rights, RegTech companies must ensure that their AI solutions are efficient, transparent, and ethical. This is something we take seriously at Corlytics, where we work to build AI systems that uphold principles of fairness, transparency, and accountability.
Adaptability is another critical takeaway. The gig economy’s regulatory landscape remains fragmented, but it’s evolving as policymakers begin to address these gaps. Financial services face a similar future as regulations around AI and compliance continue to develop. Our AI-driven tools need to adapt alongside these regulatory changes, ensuring that organisations stay ahead of compliance challenges while maintaining ethical standards.
The parallels between the gig economy and RegTech are clear. Both are industries undergoing rapid change driven by AI, and both are grappling with the regulatory and ethical challenges that come with this transformation. By drawing on the lessons from the gig economy, we can build AI-powered compliance tools that not only meet current regulatory requirements but also anticipate future legal and ethical challenges.
Alison Radu, Solutions Consultant Corlytics