The digital gap refers to the disparity between larger small businesses and gig workers, the latter of which have little to no access to tailored financial solutions from banks and credit unions.
Gig workers are 'hiding' out on the consumer platform, whereas larger businesses have the capital and resource to utilise the solutions provided to them by banks and credit unions out on their commercial platforms.
Lindsay Hodges authors this blog and delves into this digital gap and its implications, the role that non-banking challengers are playing and how we at BankiFi are helping banks and credit unions to bridge this gap.
Want the scoop in a flash? Watch the video!
Understanding ‘The Digital Gap’:
Historically, banks and credit unions have offered two distinct types of platforms: commercial and consumer. Both platforms provide basic financial services such as checking account balances, money movement, and bill payment.
However, the commercial platform goes a step further and offers services like payroll processing, wire transfers, and positive pay. These services are invaluable, however, they come at a cost; of which larger businesses with more capital will be able to pay. This is where we begin to define the digital gap.
Banks and credit unions provide these one-size-fits-all solutions on their commercial platform to businesses – however, businesses, no matter the size, cannot be siloed into one platform, due to their varying needs. Larger SMBs with resources and capital can, as stated above, utilise solutions provided to them on the banks’ commercial platform.
However, this leaves gig workers and small businesses, with little to no employees and limited cashflow, to ‘hideout’ on their consumer platform; a place where they do not have to pay any fees, but in turn they cannot access business banking solutions that can help them manage their finances, solve their challenges and thrive as a result.
The discrepancy between what larger, more established businesses are offered in terms of innovative financial solutions, and their gig/small business counterparts are what is known as The Digital Gap.
Who’s coming to the rescue?
Recognizing this unmet demand, non-banking challengers like QuickBooks have emerged as game-changers. Not only are these entities stepping up to provide checking accounts and loans tailored to the specific requirements of gig workers and smaller SMBs, but they are also going one step further by offering additional solutions that help gigs and SMBs with their accounting, invoicing, cash flow forecasting and more.
Furthermore, in 2021, QuickBooks facilitated $225 million in loans, and in 2022, that figure surged to almost a billion dollars. These statistics alone highlight the incredible market potential for banks to serve this underserved sector; your loan book and deposits could grow to new heights if solutions tailored to gigs and SMBs were made more accessible from within the banks’ digital channels.
However, if banks continue to ignore this sector of low-hanging fruit, challengers like Quickbooks will keep on providing gig and SMBs with the tools that they need to successfully run their business, bringing these customers further and further away from the bank, and, perhaps, become their primary banking relationship.
BankiFi as the bridge:
As demonstrated throughout this post, the digital gap is a mutual challenge for both gigs/small businesses and traditional banks/FIs.
The key to bridging this gap, is through partnering with friendly fintech’s - like BankiFi – who can integrate their software directly within the banks’ digital space that strives to solve their gig and SMB customer’s pain points, meet their needs and, altogether, create a holistic and customer-centric suite of digital solutions.
Don’t miss out on this golden opportunity!
To find out more about how BankiFi can help you regain relationship primacy of your gig and small business customer base, request a demo of our platform below.
Lindsay is an expert liaison between BankiFi and enterprise partners - a highly skilled professional who excels in collaborating with financial companies to gather product requirements, outline product roadmap prioritization, and communicate technical requirements related to payment and integration services within digital banking platforms.