How This Startup Is Main The Revolution To Area of interest Banking

Mobile Banking

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The summer of the Great Resignation has now lingered well into another two seasons – and there’s no sign of it slowing. More than 24 million Americans left their jobs between April and September. More interestingly, the most prominent resignation rates were amongst employees with five to 15 years of tenure. Their rate of resignation was over 54% higher in 2021 than in 2020. This shift is not about the growth in gig workers, like in years past. This trend is about mid-career, skilled professionals leaving for more flexible and layered income opportunities.

As more of us turn to running our own businesses and side hustles, we’re immediately hit by the challenges of running a slew of back office roles. When you’re the boss, there’s no HR team to guide you through benefits setup and selections. No Finance AP to hand over a corporate credit card hold a session about the composition of the retirement savings package. Slip into any number of threads about self-employment on social media channels or look at the best-selling business books on Amazon. You’ll quickly find a growing interest in how to use fintech apps, banking, and other software offerings to track expenses, account for tax deductions, and grow profitable independent incomes.

Last week, I spoke with Oona Rokyta, CEO and cofounder of Lance, about how this workforce shift and a quickly evolving fintech industry are changing what we need and are coming to expect from our banking solutions, more specifically. With customer data and industry knowledge, Oona speaks to the focus of her company, why neobanking solutions can be more flexible and attune to independent worker needs, and why providing customized financial gameplans and support will become integral to banking evolution. 

Gary Drenik: What is Lance’s mission?

Oona Rokyta: Our mission at Lance is to help people working independently to manage and grow their finances, automatically.

If you are or talk with an independent worker, you know the modus operandi today is to pull together a smattering of solutions – like a business banking account, an invoicing software, and a bookkeeping tool – to try to just manage your cash flow. To that you typically have to add solutions that can then provide various benefits and investing options. And then, as if that wasn’t enough to add to your workday, you have to determine your financial game plan and stay on top of it regularly, even as you change clients, jobs, and homes. Did you know the average person changes their job 17 times and moves 11.7 times in their lifetime? That’s just a crazy amount of changes to navigate as you look to make the most of every dollar.

With Lance, a simple business banking account allows you to aggregate all your income streams and payments – W-2 and 1099! – and trust every dollar will be put toward its best use. We want every person brave enough to step out on their own to be confident they’re opting into the best financial options for their growth.

Drenik: Why does Lance focus on freelancers? Why are freelancers good candidates for niche banking?

Rokyta: First off, well over a third of the workforce is now freelancing. That’s a huge and clearly growing market to service. Second, we deeply understand freelancers’ financial needs and anxieties. Recently, a Prosper Insights & Analytics Survey found that almost a third of people across all age groups are uncertain they’re saving enough for their future needs. This is in the midst of the pandemic as we’re all saving more than ever in recent history! This nagging uncertainty, however, creeps well beyond savings amongst freelancers – and quickly stops them from making any progress in organizing and optimizing their finances. It’s just too daunting on a daily, individual basis. That’s where we’ve stepped in to create an entire platform to introduce and set into motion best practice, customized financial offerings under the guise of a simple business banking account.

Prosper – Saving Enough For Future Needs

Prosper Insights & Analytics

Drenik: The end of the year is near. How does Lance help its users organize how much they made in 2021?

Rokyta: As our customers use their Lance account to capture payments and their debit card to cover business expenses, we’re able to categorize and add all of these amounts into a real-time, customized Schedule C form. While we help with withholding and making estimated quarterly tax payments, this completed form can help our customers easily file year-end taxes or apply for loans any time of year.

Drenik: What are reasons why someone would move their bank accounts from big name banks to smaller, neobanks?

Rokyta: Neobanks, like Lance, are increasingly competitive with more established banks in terms of fee structures as well as mobile experiences. In addition, there’s more flexibility and creativity starting to be applied today in terms of meeting focused market needs beyond marketing campaigns, like that of independent workers. Just as one example, just over a third of 18-34-year old’s want to increase their savings in the next 3 months, according to a recent Prosper Insights & Analytics Survey. We’ve seen this goal resonates strongly with our customer base as well. With most traditional banks and even many neobanks, you’d need to open a savings account, determine how much you can afford to save and then set an auto-transfer for a monthly withdrawal. Within our platform, we can turn those three steps into one. We recommend how much you should save based on your expected earnings and then once you approve that setting, we just pull the right amount into a savings account as you get paid.

Prosper – Increase Savings

Prosper Insights & Analytics

Drenik: What does the future of banking look like?

Rokyta: Beyond the niche back office needs of this growing tide of independent workers, 64% of the Gen Z demographic are looking for a personalized banking experience. As neobanks and other fintech solutions continue to drive banking and payments fees down, the real value proposition and retention opportunities lies in customized guidance provided to niche demographics. There are distinctly different financial goals, risk profiles, and offerings that are relevant to teenagers and their parents or skilled freelancers, for example. 

Drenik: What does Lance hope to accomplish in the near future for freelancers?

Rokyta: Today, a Lance account automatically recommends and sorts portions of customer payments toward customized cash flow and savings needs. In the near future, that same account will expand to ensure every freelancer can easily opt-into the best, most income-appropriate benefits and investing options available.

Drenik: Thanks for sharing all those insights from across the industry and your development of Lance, Oona. I’m sure all of us are looking forward to banking and other financial tools evolving to the point that all of us – part of the Great Resignation or not – can easily opt-into a more customized path toward financial growth. Certainly, would make an easy New Year’s Resolution at the start of each year!