PNC created an internal startup to run a mobile bank account for gig economy workers (PNC)


How Self Employed Workers And Companies Currently Calculate Their Cash Flows

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PNC created an internal startup, dubbed numo, which will initially run indi, a mobile bank account for gig economy workers, Forbes reports.

Indi has no monthly service fees or minimum balance requirements, and come with features including tax calculations, tax savings goals, and dynamic adjustments when users save ahead or fall behind. It also alerts users when quarterly taxes are due. PNC is currently testing the account with staff and has opened a waiting list.

There are gaps in banking services for gig economy workers, opening an opportunity for PNC to capture a significant share through its offering:

Nearly 40% of the US workforce takes part in the gig economy, representing $1.4 trillion in income in the US. And 12% of that workforce participates in the gig economy full-time, per a study from PYMNTS and Mastercard. This creates a massive addressable base for banks to develop solutions for.
But 53% of self-employed consumers have multiple banking relationships — suggesting gaps in bank offerings for this segment. PNC is the first bank in the US to develop an account tailored specifically around the needs of gig economy workers. Mastercard recently introduced interest-free pay advances to gig and hourly workers, which could similarly address some of this segment’s needs.
Targeting a niche audience could help PNC’s service catch on initially — but achieving scale will require a compelling value proposition. For example, Chase launched Finn, a digital-only banking offshoot tailored for millennials with savings tools, but ultimately shuttered the offering, likely as a result of an inability to stoke broad interest among millennials. PNC will have to ensure it markets the account effectively to avoid a similar outcome.

There are several features that banks should offer in order to meet the needs of gig economy workers and capture share from fintechs, as identified by a recent Javelin study. The study found that 35% of gig economy workers currently use third party providers to manage cash flow, for example, which is a feature banks should offer among these others:

Business-specific card controls. The ability to have separate controls for cards from different businesses could help gig economy workers better manage their finances. Third party providers of these services include fintechs Tide and Bento.
Mobile invoicing tools. Tide, Square, and Quickbooks offer these services, which enable gig workers to send manage invoices from one platform.
Expense reporting and receipt capture. This is a feature that several incumbent banks — including Chase, Amex, and Capital One — already offer. Gig workers could gain better visibility into their expenses through such offerings.
Cash flow insight and advice. Gig economy workers may have inconsistent cash flow due to the nature of their jobs, and with the majority of them living paycheck to paycheck, per PYMNTS, this feature has …read more

Source:: Businessinsider – Finance

      

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