TECHNOLOGY
The economy is changing - payroll must keep up
Jon Roughley, Director of Data Strategy and Innovation, Experian UK and Ireland, explains that payroll leaders are facing a turning point. The economy is shifting, regulations are evolving and digital finance is now an expectation, not a luxury. Those who adapt will thrive. Those who don’t will definitely fall behind.
Payroll is no longer just about pay Payroll professionals have always played a vital role in business, ensuring employees are paid correctly and on time. But today, payroll sits at the centre of something far bigger. The economy is shifting. People are borrowing and managing money differently and expecting faster access to financial products. Meanwhile, new regulations are putting individuals – not businesses – at the heart of their own financial data. This means payroll leaders are more and more playing a pivotal role in being the gatekeepers of financial empowerment and security. Financial needs have changed Your employees are navigating an entirely different financial landscape than they were five years ago. Cost-of-living pressures, shifting borrowing habits and digital expectations have created new challenges, and new demands. Over-50s are borrowing more than ever before Buy now, pay later usage among this group is up 37%. Four million more people now hold a credit card However, millions were unable to secure a card due to a lack of eligibility. Gen Z expects instant digital access to financial data But many businesses still rely on slow, manual payroll processes. Overall, more than half of Brits (57%) either have or intend to open a digital- only bank account 87% of UK adults use a form of online banking or remote banking, which is around 47 million people. Yet, despite these ‘macro’ changes, payroll processes haven’t caught up.
Employees still need to source payslips, wait for internal responses and deal with delays – all at a time when instant access to financial services is the norm. For payroll teams, this is no longer just an admin problem – it’s a business risk. Regulations are shifting – and payroll is central to the change Governments and regulators have recognised current processes are creating unnecessary financial barriers. That’s why new regulations are reshaping how data is managed and used, putting individuals in control. The Data Use and Access Bill aims to facilitate secure, ethical data sharing while ensuring individual privacy and control. It mandates high standards for data protection, transparency and consent, empowering individuals to port their data securely and decide how it’s shared and used. The Financial Conduct Authority (FCA)’s Consumer Duty introduces higher expectations for transparency and fairness in financial services. Lenders and financial providers now must ensure their products are fit for purpose – and payroll data is key to making that happen. Why does this matter to payroll leaders? l lenders will require more accurate, real- time income verification to ensure they offer the right products at fair rates l incomplete income details could mean employees are offered worse financial terms – or even excluded altogether. These regulations aren’t just about compliance – they’re part of a wider movement towards smarter data, transparency and financial inclusion. Payroll teams hold the key to making this a success. What this means for payroll leaders Payroll has always been about accuracy, compliance and efficiency. Now, it’s also about empowerment .
By modernising payroll data-sharing, and allowing the individual to share their data digitally, if they choose, businesses can: l free up time by eliminating repetitive manual requests l improve employee financial wellbeing by reducing delays in income verification l support financial inclusion, ensuring employees aren’t unfairly excluded from credit and other financial products l completely automate the process, including referencing checks l offer their employees better protection through a more secure means of sharing the relevant information. This isn’t just a payroll challenge – it’s a business-wide opportunity to build trust, reduce admin and stay ahead of regulatory change. The reality is that it’s already in place for a large proportion of UK pay as you earn. Major lenders such as Nationwide Building Society are already using it in mortgages, Konfir have seen huge benefits for background checks – and most payroll software partners are already offering this benefit. It’s available to everyone, but few realise. Why payroll must act now With new regulations, shifting expectations and digital finance becoming the norm, payroll leaders can no longer afford to delay. Those who act now will lead the way in payroll transformation. Those who don’t? They risk falling behind in a world where financial access depends on real-time, employee-driven data. The question isn’t if payroll will evolve, it’s how fast businesses will adapt. Find out how you can enable this benefit across your organisation, by contacting datasharing@experian.com. Please note, this is a completely free initiative for employer and employee. There’s no reason for either party to pay for the privilege that’s their right to access. n
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
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