Banks Can Win in the Flex Labor Economy – With Help from Fintech

Businesses with a hybrid labor pool have unique needs. Banks could capitalize on this – with the right partner.

 

(10/7/2021) – With more and more companies engaging a hybridized workforce of traditional and freelance workers, some are now using the term ‘Flex Labor Economy. Companies that use both types of labor have a unique set of needs related to payments – and banks that are open to developing partnerships with fintechs like KyckGlobal are in an ideal position to benefit.    

Why the need for partnership? The traditional products and services of today’s institutional banks are only going to meet a few of the needs of businesses in the Flex Labor Economy. That’s not great news for banks, since the number of contractors is expected to make up HALF of the American workforce over the next decade (it’s roughly 20% now). And it’s well-known that banks are challenged in terms of their internal capacity to innovate. The importation of proven tech and agility via partnerships with fintech firms like KyckGlobal allow banks to meet the needs of differentiated customers – like companies engaging contractors. 

Let’s take a look at these companies’ unique needs, and how a partnership with an emergent fintech firm like KyckGlobal can help financial institutions fill gaps and grow market share. 

Most conspicuously, the days of twice-a-month payroll are over. More than half of freelancers work for more than one employer at any given time, and research shows that contract workers give higher priority to employers who pay out faster. Businesses with a hybrid workforce need faster payment options to pay contractors.  

Banks can offer business clients the ability to make instant digital payments by white labeling the KyckGlobal payments engine and featuring it as a feature of the bank’s own treasury management services. The client business then uses the instant payment flavors to pay contractors to retain talent and improve their employer brand. (The KyckGlobal platform also features split payments, allowing contractors to route a percentage of each payment to a second account or hot wallet service, thereby adding additional value to both the client business and the provisioning bank.)  All available payment types are available from a single point of reconciliation and settlement.  

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Second, the freelance talent pool now stretches around the world, with more and more businesses looking well beyond the nation’s borders for the perfect candidate. This fact adds a layer of complexity: the need for faster payments still applies, but the payer now needs an array of payment types to accommodate the varying degrees of banking sophistication found in countries around the world. 

Using the same white-label approach, FIs can provide business clients access to six distinct international payment flavors, including PayPal, wires, Visa Direct Push to Account, and International ACH. The platform also provides international contractors secure access to cash using a one-time code, shown by the payee at any of 350,000 global endpoints in popular retail locations to pick up their payment in local currency.   

It’s worth noting here that the provision of a more robust array of payment flavors doesn’t end with contractor payments. Companies that need to make business to consumer payments of any kind will first look to their bank to explore the options, and speed to settlement will be critical. Through bank partnerships, the KyckGlobal payments engine powers payouts for insurance claims, settlements, consumer loans, gaming awards – literally any business case where speed and payment choice is key. 

There are several more valuable functions that banks can leverage to build revenue when partnering with supportive fintechs like KyckGlobal. These services are of particular value to companies who define the Flex Labor Economy: digital contractor onboarding, automated annual tax summaries, instant pay and daily pay, and more. FIs can select features a la carte and build marketing campaigns to pursue differentiated customer sets – working with businesses with a hybrid workforce is just one example.

With proven fintech partners like KyckGlobal at the table, today’s FIs will be abundantly prepared to meet the needs of tomorrow’s business trends.