Next-gen Fintech takes on the modern solopreneur

The proliferation of the gig economy has opened up swaths of new career avenues for those professionals that, today, reach beyond those mega-platforms. It’s a new generation of solopreneur that further blurs the line between independent contractor or gig worker, and small- to medium-sized business (SMB).

Over the years, B2B FinTech has stepped into the fill the gaps in financial technology designed for SMBs left behind by legacy financial institutions (FIs). Now, according to ZenBusiness Senior Vice President and Head of Product Lamine Zarrad, it’s time for a new age of SMB FinTech to fill similar gaps for solopreneurs.

In an interview with PYMTNS, Zarrad unwrapped the industry trends and SMB needs that have created opportunities for the next breed of SMB FinTech to support the next wave of SMBs.

SMBs’ Next Wave

With traditional FIs often finding SMBs too unprofitable to focus on product innovation, FinTechs have stepped in over the years to design platforms for this segment of the business community.

That innovative push eventually extended to the gig workers and independent contractors that began to flood the market thanks to the rise of mega-platforms like Uber and Grubhub. As more professionals explored the professional freedoms of gig work, FinTechs similarly explored how to support personal cash management for these individuals.

Today, noted Zarrad, there is a new wave of independent professionals.

“It’s no longer centralized across a few large players,” he said. “It’s completely decentralized. The contractor is no longer a glorified employee who checks in and checks out. They are functionally an SMB.”

As more professionals decide to part ways with the full-time workforce under a single employer, there is a point at which that individual becomes their own de facto SMB. And as such, the FinTech solutions once designed to help individuals manage finances as a gig worker are no longer tailored to the needs of the one-person SMB.

Zarrad highlighted a prolific list of workflows these professionals must now take on as their own SMB, including accounts receivable (AR) and accounts payable (AP), advertising, cash management and more.

Stepping in to address those needs, ZenBusiness has shifted its market strategy over the last year since its acquisition of Joust in July 2020. The effort could signal a broader shift in B2B FinTech; as the profile of a solopreneur shifts, so must the FinTechs that aim to service them.

Putting It All Together

According to Zarrad, this adjustment for ZenBusiness meant reconsidering the approach to an end user that has the same workflow needs as an SMB, but with only one person able to handle them. As a result, the end user required an approach to back-office automation that differs from much of the SMB FinTech solutions on the market today that prioritize integration with other third-party solutions.

“It’s very interesting because compared to traditional SMBs and startups that are happy, on average, to use 30 to 60 different products to operate, a business of one doesn’t have the savvy, they don’t have the ability to hire a CFO,” Zarrad said.

Rather than focus on cross-platform integration, ZenBusiness is instead investing in becoming an all-in-one solution for solopreneur end users. It’s the result of extensive research, Zarrad noted, that revealed the need for single-person operations to have all functions unified.

That’s no easy feat for a single FinTech. Today, ZenBusiness’s offerings, including its most recent rollout of ZenBusiness Money, include a variety of workflows like invoice, payment acceptance, reporting, website creation and more. But there are still features missing, leaving plenty of room for evolution.

For example, the platform today cannot facilitate payment initiation, although that service is currently in the platform’s product roadmap. Further, before the acquisition, Joust had an invoice financing functionality, a tool that Zarrad said was not migrated over to the newly merged ZenBusiness. But what did translate in the wake of the acquisition are concepts related to how to support a solopreneur in getting paid on time, including the best strategies for customer outreach and payment reminders.

The current ambiguity of the regulatory framework for these SMBs also leaves room for FinTechs to migrate the burdens of compliance — for instance, when onboarding a new client — from the solopreneur to the FinTech partner. As those regulations evolve, so will the FinTechs that must adhere to them.

Undoubtedly, the solopreneur FinTech industry is in flux, just as the solopreneur community is embracing new business and working models. There is plenty of work to be done, said Zarrad, not only in areas like risk management and compliance as regulations shift, but also across the broader concept of automation for the betterment of business financial health.

Automation is a pretty broad concept, but automation, to us, means letting machines do a lot of the manual work and medial decision-making for our users,” he said. “Think of robo-advising and wealth management. We’re definitely architecting our solution to follow that blueprint.”

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