With an estimated net worth of more than $104 billion, more than 50 million independent entrepreneurs are part of the creator economy of YouTubers, TikTokers, bloggers and influencers.
Coined by YouTube in 2011, the term “creator” refers to any person who produces and monetizes digital content through the support of their audience.
At least 2 million creators are bringing in six-figure salaries, and 41% earned a living wage of more than $69,000 per year, emerging as a strong “middle class.” In 2021, the creator economy attracted more than $1.3 billion in funding, though most of that went to the top talent.
Despite the significant market power held by the community of creators, their distributed revenue streams — including multi-platform publishing, sponsorships, affiliate marketing, merchandise sales and direct donations — can make it difficult for even the best-earning creators to demonstrate the predictable income financial institutions traditionally need to determine creditworthiness.
Paired with the ebb-and-flow popularity of individual platforms, creators’ sometimes unpredictable cash flows make traditional institutions cautious in lending, leaving creators unable to secure lines of credit, mortgage or rent approvals, or funding to grow their businesses.
Now is the prime opportunity for savvy financial institutions to become the banking partners creators need to thrive. By embedding in the creator community, financial institutions stand to build significant customer affinity while increasing revenues in the short and long term — for themselves and their creator customers.
Becoming a Partner for Creators
Influence(r) Invoicing
Payouts for advertising, product placement and sponsorships can be unpredictable and slow. To help creators level their income, financial institutions can offer invoice financing — paying creators’ invoices almost instantly in expectation of later fulfillment. These short-term loans usually have terms ranging from 14 to 90 days, and payouts can be turned around as soon as the next day.
Another potential solution is innovating streamlined payment systems to speed receipts. Willa is one example of a platform working to help creators remedy this major pain point, smoothing lumpy cashflow for more demonstrable, quicker income. Creators can send brands and agencies a dedicated link, making invoice fulfillment a one-click process.
Embedded Excellence Builds Loyalty
For platforms like TikTok and Instagram, there is an opportunity to embed financial services and stay relevant, and stemming the tide of creator flight — leaving certain platforms for personal or professional reasons.
In doing so, financial institutions stand to increase engagement and retention of both content makers and audience members, further diversifying revenues away from advertising by offering Banking as a Service (BaaS) via innovative software connections, or APIs.
Influencer “marketplaces” like Collabstr, Tribe, and #Paid connect creators with brands to build creative campaigns. These sites match products and services to influencers and audiences who are likely to increase awareness and sales, while at the same time offering tools to track analytics and more.
Embedding financial services within these platforms could take the connection experience to the next level by automating invoicing once a connection is made. On the flip side, influencers with financial savvy could share your organization’s solutions with their content community, engendering loyalty and expanding your brand throughout the sector.
Give Credit Where It’s Due
Most small businesses need access to lines of credit to continue to grow. But creators are often kept out of the credit market, missing out on financing short-term purchases, earning perks and corralling business expenses. Solutions that provide financial flexibility for creators will help them grow their businesses and reach the next level — growing the financial institution’s revenue in the process.
Karat Financial is one firm working to bridge this gap for creators. Its Black Card offers customized perks, and customers are approved for credit based on social media analytics and other non-traditional metrics. Karat includes creators’ fan and follower counts when making underwriting decisions such as credit limits, and targets rewards to categories of interest to creators, such as camera equipment, cosmetics and electronics.
Another firm, Creative Juice, recently launched a $50 million fund to invest in helping creators grow their businesses. “Juice Funds” stand in place of traditional loans, offering creators access to capital upfront in exchange for a percentage of their earnings over an agreed-upon period.
Tools, Education & Community Create Success
Most importantly, creators need a financial partner who understands their unique needs. A community of 50 million innovative entrepreneurs is ready to work with institutions and brands that understand their pain points and can provide tools to help build sustainable growth.
Many creators are young and have been focused on growing their enterprises rather than attending business school. So, financial literacy is important.
Because their personal and business lives are so intertwined, some creators struggle to calculate and categorize expenses, set savings goals, and understand reporting or investments. Your institution could offer educational coursework in-app, with instructional videos, lessons and expert tips.
You might set up a peer-to-peer community, matching your experts and financially successful creators with new or struggling entrepreneurs to brainstorm and discuss shared challenges. Those conversations could become a robust incubator for further feature enhancements — or launch the next big creator, with your brand to thank.
The better customers understand their finances, the more successful their businesses can become — and the more you help them, the more vocal ambassadors will be about your brand.
Banking on Creators for Long-Term Affinity
Creators are primed to be the next frontier in niche banking, and these customers are ready to partner with an institution or brand that understands their needs and prioritizes personalized tools and excellent customer experiences.
Savvy firms will recognize the opportunity to grow their creator-centric solutions. By building brand recognition and providing novel tools for young entrepreneurs, your institution is growing organic customer affinity — with clients who unabashedly press the “share” button.
Interested in an end-to-end technology solution that places your financial institution at the center of the creator economy? Discover how Nymbus can partner with you to capture new markets, build new revenue and break new ground.
