The term “gig economy” originated in early 2009 at the height of the financial crisis. It referred to people who were unemployed and making a living by “gigging,” or working several part-time jobs to make ends meet. Times have changed! Today when somebody refers to the gig economy, it’s in reference to the 25%-35% of the US workforce that now falls under this category. Many of these people are part of this group not because they are unemployed and taking whatever jobs they can, but because the gig economy workstyle provides them with flexibility or a way to make some extra money.
While the gig economy has many benefits, it also creates challenges for both workers and employers. For every article online touting its advantages, there are just as many pointing out the problems it presents. Harvard Business Review recently published a piece, “Thriving in the Gig Economy,” that illustrates the competing pros and cons for employees: independence and personal confidence are big positives, while negatives include anxiety and isolation. However you feel about it, though, it’s clear that banks need to figure out a better way to deal with it.
Both gig employees and employers have specific banking needs. Many of the traditional banking processes don’t work for this burgeoning population. Employees need faster access to their earnings, alternative loan qualification assessment techniques, more convenient ways to deposit their income, and portable tax planning and retirement benefits. Employers are already finding workarounds to the traditional systems in order to get payments delivered faster.
Here to Stay
The gig economy isn’t going anywhere. Banks that offer strategic services and technologies that can assist gig workers will be able to build their customer base and retain more of their current clientele. Early adopters will significantly grow their business and increase profits.
Our latest whitepaper, How the Gig Economy Is Transforming Banking, explains how today’s institutions can capitalize on and aid this fastest-growing segment of the economy. Download the whitepaper now to find out what specific hurdles gig employees are facing, the solutions that are working, and what banks can do to be part of it!