The future of banking for freelancers
Anyone who has ever felt trapped in an office, annoyed by a micromanaging manager or exhausted by office politics has probably dreamed of leaving it all behind and going it alone. Six years ago, I left corporate life in London’s financial centre to begin freelancing. The long hours, endless commute and growth of the digital economy made me reassess the way I wanted to work and live.
The demands of corporate employers are making freelancing more appealing for millions of workers around the world. Independent minded workers can choose from a wider range of projects, get paid for delivering great work and meet new people who are creating amazing things. And transformative new digital platforms such as Airbnb, People per Hour, Task Rabbit, Yuno Juno and Upwork are creating larger, more transparent, and more efficient marketplaces to connect freelancers with buyers of their services.
It used to be that a full-time job for decades with one employer was normal, but this no longer reflects how a large part of the workforce, rooted in the digital economy, makes its living. McKinsey states there are 162m independent workers across the EU & US and research by PwC shows that by 2025 the five prominent collaborative economy sectors could generate global revenues of $335bn. Research by ipse and the Small Business Research Centre estimated that the UK’s 1.8m freelancers contribute £120–125bn to the economy each year.
More money, more problems
Being a freelancer isn’t without its challenges. A lack of work/life balance, social isolation and money worries can mean being a freelancer is detrimental for mental health. Freelancers waste on average 30 days each year on admin across project/client management, bookkeeping and finding work. That burden may grow: HMRC states it is losing £3.5bn in tax each year to the sharing economy, but its answer, “Making Tax Digital”, could be a huge burden for freelancers who will be expected to file tax returns five times a year. And freelancing makes it difficult to understand complex business products and restricts access to basic financial products such as mortgages, loans and pensions.
Solo — Smarter Freelancing
It doesn’t have to be this way. Better technology could enable freelancers do what they do best — using their talents and experience to help clients solve problems — with fewer headaches in the background.
That’s why we’ve created Solo, a free app that saves time and tracks money for freelancers. Solo replaces 10 different products and processes with one simple app, freeing up time for freelancers to deliver great work and be financially secure. Solo combines CRM, financial management and beautiful UX to help freelances manager their business anytime, anywhere.
‘Open Banking’ — the world is changing
Freelancers should be looking to take advantage of a new, ‘open’ era in banking. From 2018, freelancers and other small business owners will be able to securely share their financial data with trusted third parties. UK and EU authorities are putting in place the framework to ensure this data sharing is secure and reliable.
At Solo, we’re building an application that will make open banking useful for freelancers. Imagine a time when Solo tells you an invoice is late, picks out the best financing to cover negative cashflow, and finds the best insurance for you and your clients. It’s all about empowering freelancers with resources normally reserved for much larger businesses.
Sonny Sood is the CEO of Solo.
Banking could work better for small businesses. Yup. So what does that look like? The Open Banking Anthology, a publication of the Open Up Challenge, is where we look to the future by paying closer attention to what people are doing in the present. You can read more on ‘open banking’ here.
