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The freelance market is growing. Grow with it.

As an increasing number of professional services move towards a demand initiative, the gig economy has become a major part of our overall work landscape. The growth in the number of workers who file 1099s — in other words, self-employed, independent contractors — is widespread, cutting across various fields. To keep up, banks must understand the new face of the freelance workforce.

Paramount is understanding that gig workers face unique challenges when it comes to financial services, including savings, mortgages, taxes, retirement, and healthcare. What’s more, perceptions of the gig economy have not caught up with reality. Many people — and financial institutions especially — think that only jobs like contractors or rideshare drivers make up the gig economy, but that is no longer the case (and arguably, never was in the first place).

This new, evolving freelance economy now includes all kinds of professionals, from artists to hair stylists to computer programmers. Whether these individuals call themselves entrepreneurs, freelancers or contractors, they all must file 1099 forms come tax time. Not only does this make filing taxes more difficult, but it can also create problems with their banking — difficulties that many of these workers have experienced before and that still sours their view of banks.

Banking isn’t one-size-fits-all

Unlike most people in the traditional workforce, freelancers and other gig workers have income from multiple sources, which comes into their accounts in varied amounts and at irregular intervals. Even the payment channels themselves can vary, from traditional paper checks and cash to P2P digital payments and even cryptocurrencies. As a result, the normal rules for providing financial services often do not apply.

Many (though not all) banks have frankly failed these gig workers in the past, often for no better reason than the negative connotations attached to the term “freelancer” in financial circles. If a customer could not be labeled an “entrepreneur” trying to start a business, some institutions would take an extremely conservative (almost suspicious) view because of the person’s lack of a traditional “consistent” income. In some cases, banks have turned away potential borrowers or account holders who would have been excellent customers. Thankfully, that outdated viewpoint is starting to change, and bankers are waking up to the financial value of gig economy workers and the business opportunity to grow their deposits over time.

Future workforce = future deposits: Why banks should want freelance customers

The gig economy represents one of the fastest growing segments of our national workforce, with reported numbers as high as 54 million people gaining some form of income from 1099 filings. Furthermore, the freelance workforce has grown at a rate three times higher than that of the traditional workforce. This level of growth, along with the amount of self-employed income available, is projected to continue over the next several years, and thus represents a significant potential source of new deposits.

While this can be a lucrative opportunity for banks to engage new customers, more than a third of banks’ current customers are already part of the gig economy. With many companies, and even entire industries, now built around a 1099 workforce or exploring moving some part of their workflow to this model, these numbers are only going to increase.

Gig and freelance workers accounted for $1.4 trillion in total income in 2018, with 40% earning more than $100,000 annually, according to the latest PYMNTS/HyperWallet Gig Economy Index. Though once the main purview of seasonal workers or rideshare drivers, the face of the modern freelance economy is changing. With more tech industries and professional services, such as healthcare and creative designers, increasing the number of “gig” opportunities available, the top third of this market is making more than the national median income.

Building better partners: How to earn gig customers

Bankers now recognize that they can — and should — work to attract and retain these customers. The first step is understanding their unique pain points and needs when it comes to their finances. For example, banks that offer specialized lending, HSAs or retirement savings options geared towards asymmetrical income generation can entice these potential customers and create powerful cross-selling opportunities down the road that ultimately benefit both sides.

While the right products can be attractive to gig workers, banks who show true interest in supporting their financial wellness will ultimately keep them engaged. This can fill an important need, as many freelancers have entered the gig work landscape only to discover they are unprepared for the financial management aspects that go along with it. For example, banks that can provide straightforward information on saving, paying quarterly taxes or managing expenses could establish themselves as a trusted financial partner for life.

Perhaps the greatest opportunity here lies in mortgage lending, a process in which applicants’ W2s serve as the de facto starting point. Unsurprisingly, the whole process breaks down when an applicant cannot supply this document as proof of employment, and 1099 workers can be denied regardless of their overall income. While alternative credit scoring is gaining ground, more banks should consider if some of these models may be worth leveraging, or risk turning away qualified applicants in favor of less profitable ones who simply fit more neatly into the traditional loan decisioning protocol.


The way Americans earn their living is evolving, and so banks must also change to meet the needs of their customers. Several larger banks already recognize the importance of serving this growing freelance workforce and offer programs and tools specifically designed to attract them. Community banks must also consider how they can cater to this audience, or risk being left behind. Large or small, banks that can prove themselves to be a true financial wellness partner for all their customers, including freelancers, will gain a significant competitive advantage when it comes to the growing gig workforce.

Rick Gonzalez is the founder and CEO of RoamHR, the digital platform empowering the freelance workforce to easily and effectively manage taxes.