Almost every person living in an urban/semi-urban area in any part of the world has interacted with someone working in the gig economy. You have likely been a part of the gig economy in some of your life. Uber drivers, Airbnb hosts, freelancers on Fiver, and Gumroad artists are just some examples of individuals participating in the gig economy.
The gig economy is expanding its horizon rapidly. Internet startups and the desire to have freedom of work are the catalysts in the process. According to a report by Upwork, freelancers contributed $1.3 trillion to the U.S. economy in 2020.
Fintech and gig economy
Where there is a transaction happening, there is a scope for fintech. The gig economy is an ecosystem working around freelance workers, buyers, platforms, and regulators. Every day, thousands of transactions happen amongst these entities in the gig economy.
The new economy, which allows you to work at your time, from your place, and at your convenience, is so much comforting. But the economic stability and systems for the same are not comforting at all.
One of the most prominent problems of the gig economy is financial stability and security. How? Let’s understand the financial gaps in the gig economy.
Financial gaps in the gig economy
The gig economy, as mentioned above, generates a tremendous amount of cash flow for workers and platforms. Despite this, there are financial problems at both ends. The matured marketplaces dedicated to the gig economy have resolved many issues for buyers, including trusted workers, guarantee to deliver work against payments, secure modes of transaction, seller verification, and much more.
The more significant gaps lie on the side of freelance workers. It is safe to assume that freelance workers have yearly income in line as compared to full-time employees in the same industry with the same experience. But due to the gig work and inconsistent month-on-month income, they are deprived of many financial benefits.
Loans, insurance, investment accounts, and personal credits are financial instruments that are not made accessible for freelancers due to unstable cash flows. Many freelance workers don’t have the guarantee of payments for delivered work due to the informal approach to work.
Traditional banks are unwilling to make their hands dirty to fill these gaps and jump into the gig economy. Thus, there’s an excellent opportunity for fintech startups and companies to fill the gap and revolutionise the gig economy to make it more attractive.
The gig economy is full of young individuals, which is an advantage when solving problems with technology. You get a receptive audience that will be prone to accept changes for betterment.
Let’s fill this gap together with the help of fintech.
At MSBC Group, we stand to deliver superior technology solutions that are meticulously designed. Our vision to transform tomorrow gives us the horizon to cater to all sizes of businesses, from startups to enterprises and conglomerates.
Do you have an idea to fill the financial gaps in the gig economy with fintech? Get in touch with us, and we can bring your vision to reality with our fintech software solutions.
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