GIG ECONOMY BANKING
The Gig Economy has been a growing trend supporting the world economy for years. Thanks to the recent technological advancements and the rising popularity of online platforms such as Uber, Airbnb, and Fiverr, new forms of freelance work became widely available to people everywhere. Although the Gig Economy seems promising there are still challenges that a freelancer faces and one of which is finance. Gig workers around the world have long struggled to gain access to many mainstream financial products and services because of their inconsistent cash flow and lack of substantial credit history. Moreover, this problem became worse when the COVID-19 pandemic began, making freelancers as the hardest hit groups of our today’s crisis.
Gig workers have long been underserved by financial services companies due to their thin credit history and variable income. The good thing is before the pandemic began, there has been a new wave of innovation to help gig workers through the crisis with targeted products and services. Because unlike traditional employees, freelancers don’t have a steady and secure source of income.
Here are just some of the financial challenges freelance workers face:
- Inconsistent income patterns
- No employer-provided benefits
- Unusual tax requirements
Finding the solution to these problems is still a quest although there are a few answers to it, the question of being enough is still unsolved. One of the solutions is Neobanks; this is a kind of digital bank without any physical branches. In such a compelling scenario, banks are resorting to innovation along with the changes in the labour market thus leading to an online solution to help non-traditional employees (freelancers) who are not listed in a company’s payroll hustle.
What does Neobanks offer?
Neobanks offer innovative features and offerings that are different from traditional banks including fast account opening, free debit cards, instant payments, cryptocurrencies, lower costs, mobile deposits, P2P payments, mobile budgeting tools, user-friendly interfaces, etc.
In conclusion, imagine how it would be easier for a freelancer to manage his/her incomes with innovative banking?
Some of the banks available to freelancers are:
Monzo Bank – a new Neobank that has gained traction in European markets in recent years.
There are Banks that offer Invoice Financing options for freelancers, so you can take out a loan against invoices that are coming in soon.
There are banking services that cater more specifically for people who deal with International Clients and need money to be transferred across borders.
The NeoBank sector, Quasi Bank sector and digital banking solutions coming to the market are helping Freelancers to build credit and process their payments even faster than they could in the past.
