Gig Economy and Banking

How large is the gig economy?

Financial institutions like banks and credit unions must adapt to the needs of their customers if they want to survive. While estimates of the gig workforce vary, the number of adults engaged part or full time in freelance work, temporary jobs, and side hustles are massive and growing, with nearly 60 million U.S. adults earning at least some freelance income last year.

Whether they have both regular jobs and side jobs or work solely as members of the freelance community, gig workers have unique requirements for banking services. They have inconsistent and typically unpredictable income patterns, impacting their credit needs and how they file taxes. The younger the worker, the more likely they are to freelance, which makes these potential customers the future of financial services, and an essential target for banking or credit union startups or more mature institutions looking for growth.

How to attract the gig worker?

But how can you attract them? These banking customers have unique expectations. They do not want traditional services like checking and savings accounts, they may not trust you, and they loathe sharing any financial information. They need services that make their lives more manageable—like access to their income when they earn it, not on an arbitrary schedule that might not fit their needs. Fintech apps can provide the access gig workers want to pay and expense management systems to help them organize their professional lives with receipt capture and sorting.

Gig workers need better access to credit products that don’t rely on traditional salary standards and helpful options like income smoothing, flexible payment due dates, and integrated strategies for supporting their micro-businesses. The bank or credit union that offers this group a simple, mobile way to manage income, outflow, and administration will have the inside track to gaining and keeping their business.

Indi is an app launched by PNC in 2019. It assists gig workers (and others) in categorizing income, setting aside what’s need for taxes, and reminding them when quarterly payments are due. It has automatic receipt capture and categorization, yearend expense reporting, and no minimum balance requirement.

Similarly, Joust, which uses NBKC Bank accounts, offers an option for a guaranteed payment of invoices—which sounds like pure gold to freelancers waiting for clients to send money that is due. This service (called PayArmour) is fee-based, but Joust also has a free deposit account and debit and credit services available.

Similar services will attract and help retain the growing gig workers seeking innovative banking services to simplify their business and personal life management.  

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