You’ve heard right: The numbers that influencers on TikTok, YouTube and other social media platforms rake in can be jaw-dropping.
These influencers can bring in upwards of around $1,200 for each social media post when they have a significant following, according to market data company Statista. And research shows that market is only growing, doubling its size from 2019 to 2013, for a record $21.1 billion.
All that money is going in a bank, somewhere.
The tech-savvy Cross River Bank is one of the institutions that’s trying to be that landing spot. Among other connections to the gig economy, it’s working with partners developing services specifically for social media influencers — now a large portion of the gig economy’s market share.
“There’s a couple reasons to develop a specific (fintech) product for those individuals,” said Anthony Peculic, head of cards and Banking-as-a-Service at Cross River. “One is the growth of the market; another is the feeling that no one has been developing solutions that address the needs of that audience.”
This Fort Lee-based bank’s interest in positioning itself to serve the gig economy dates back several years, and originally was concentrated on rideshare services such as Uber and Lyft.
Not a lot of banks have made this a focus. Cross River’s leaders believe that, as a fintech institution, there’s a natural fit for those working in this digital-enabled sector.
“We’re fundamentally supporting clients with innovative fintech solutions,” Peculic said. “What that means is that, for the most part, we’re seeing more of a focus from that segment than you would probably more of a traditional bank segment.”
Peculic said they’re always on the lookout for prospects in this particular audience in need of solutions. Sometimes those are more business-oriented needs, such as payment and lending solutions. Other times, it’s more typical consumer banking products.
There are nuances to these gig workers’ financial life that Peculic said the bank can help them with. Most of them don’t have an extensive business history — or a credit history, for that matter. Cross River is one of the banks providing them with the products to get that history established.
When operating as businesses or limited liability companies, or LLCs, these gig workers also need to have their expenditures separated and managed appropriately, to fit with the circumstances of how they operate and file taxes.
Real-time access to earnings is also popular for this client segment, Peculic said. They don’t want to wait for traditional pay cycles to get paid for the business they conduct.
There’s features of gig work that makes these unique clients challenging for a bank to work with, especially as certain states — New Jersey, for one — introduce changes to whether certain gig workers can remain classified as independent contractors.
“There’s certainly room for transparency, let’s call it, as to their status,” Peculic said. “So, to me, it seems that coming up with solutions in this segment has to involve innovators in this space working together with regulators.”
Regardless, with 26 million individuals being considered some combination of gig workers, freelancers or independent contractors nationally — financial institutions are convinced it’s a market worth going after.
“That might be less than 10% of the population, but it’s still larger than some other markets we’ve come into in fintech and been very successful,” Peculic said. “It’s growing, and will continue to grow as we see a higher percentage of younger workers tending to go down this path. And there’s also the element of those of us getting later into our careers will want to think about doing consulting or something on the side.”
The common thread is that workers increasingly want flexibility in their work, he added.
By extension, they want flexibility in their banking services, too.
“In terms of this market, and these individuals, the aspect of flexibility is key,” he said. “So, we want to be part of enabling that and providing solutions that matter to them.”
