Products for solo-entrepreneurs
What is going on?
The pandemic has accelerated changes in the labor market: full-time employment is being replaced by part-time employment, and the number of freelancers is steadily growing. According to Gartner, 32% of companies are replacing full-time employees with temporary staff. Also, the number of digital platforms that match clients and contractors has increased 5.5x in the past decade — from 142 to 770. The rise of the solo-entrepreneur economy not only allows people to choose who to work with but also generates a higher income: in the US, 65% of freelancers earn more than when working for an employer.
At the same time, gig-workers face similar problems as small and medium-sized businesses — for example, raising funds to equip the workplace or working capital to fulfill orders. Additionally, contractors must take care of health and social insurance on their own. As a result, the new type of employment requires new fintech solutions.
What will happen next?
Scenario 1
The trend will continue to develop but stay niche. The number of neobanks for freelancers, alternative loan products, and closed ecosystems on the market will increase. Platforms will retain performers by providing funding based on their own data on completed orders — just like marketplaces retain sellers today.
Scenario 2
The principles developing in the product niche for solo-entrepreneurs will be carried over to the mainstream market. In this case, traditional scoring and decision-making approaches might be completely revised, and the market for financial products will expand significantly.
Regulation of new forms of employment
Many countries are only drafting legislation to regulate the relationship between independent contractors and client companies.
The need to rebuild business processes
Not all companies know how to work with freelancers and solo-entrepreneurs in terms of document management, taxation, pricing for project services, etc.
Regulation of alternative payments
Donations and other types of alternative payments still remain in the regulatory gray zone. It’s essential to decide how to carry out AML checks and determine the line between a donation (gift) and income for taxation. This will affect the distribution of responsibility between the participants in the payment chain.
Lack of investment in new scoring models
Investors are reluctant towards credit technologies since model training will burn a portion of the funds.
Use Cases
Niche fintech
Such products allow freelancers to open and maintain bank accounts, issue bank cards, and make payments. But that’s not it: for example, they can also automate document flow, which is important when working with corporate clients.

Transaction-focused scoring for the gig economy
Tech platforms understand their users better than banks and insurance companies. Aggregators and marketplaces are more vigorous in offering credit and insurance products to independent contractors who use these platforms to find clients.

Payment instruments
There are developments in terms of donations, platform-specific internal currencies for freelancers, and other new "gray zone" payment instruments.

Risk management
A growing number of fintech companies are helping independent contractors achieve greater financial stability. For example, they offer freelancers an equivalent of a paycheck advance or specialized types of insurance.