Meet the new economy, powered by social
The fast-growing creator economy is driven in part by a new generation of entrepreneurs, a segment Visa recognizes as SMBs. Visa’s latest study on Next Gen SMB owners highlights their preferences, like their use of social channels for business. In fact, these Gen Z and young Millennial small business owners ages 18–35 use social channels more than other platforms to sell online, and 49% of them use social media as the primary source of information for their business.¹ This highlights their desire for social-savvy resources, online support and global digital payment options.
Traditional banks could miss out
Creators aren’t always served well by the current financial system. Although the creator economy is still in its early stages, it’s growing rapidly and transforming both the way entrepreneurs earn income and connect with their customers. Yet many traditional banks rely on business models that don’t take into account the unique qualities—and enormous earning potential—of the Next Gen SMB segment.
Many creators struggle to get paid quickly and to secure funding for their businesses. This makes instant payouts and access to funding core areas of opportunity for FIs who want to seize the Next Gen opportunity. Key players in the financial space can address these challenges by implementing new approaches to vetting clients and customers.
Data-driven insights highlight the opportunity
What else do Next Gen creators want in a financial partner? About 46% value innovation in a bank,¹ underscoring their interest in digital-first, real-time financial tools. Visa’s study also reveals that 67% prefer the stability and security of traditional banks or credit unions to fintechs.¹ This presents an opportunity for traditional banks, who already have core qualities creators prefer, to tailor their financial solutions to win them over.
For Next Gen SMBs, it’s also important to have a financial partner that recognizes how their business operates differently from traditional businesses. Surveyed Next Gen decision-makers reported that 20% of their sales are international and they spend 27% of their marketing dollars internationally.¹ This highlights their need for solutions that can help streamline their cross-border transactions.
In addition, because many Next Gen SMB decision-makers are still learning the ropes of business ownership, they prefer high-touch services and financial business guidance, as well as holistic, integrated online and in-person experiences. Contrary to popular belief, 41% do their banking in person,¹ highlighting another area where established banks can win over digital-only alternatives.
Tailor solutions to capture the market
Many fintechs are moving in on the Next Gen segment, pivoting their suite of offerings and their sales strategies to win them over. And traditional FIs are being called to do the same. By utilizing financial and payment solutions from Visa, financial institutions can capture their share of the market by offering insights and connecting creators to solution providers, banking services, online storefronts, content platforms and more.
In the rapidly shifting creator economy, financial partners that fail to pivot to this rising demographic risk being left behind and with SMBs contributing up to 70% of the global gross domestic product, the opportunity is significant.¹ FIs who tailor their services and payment experiences to this growing SMB demographic can earn their business now with the goal of establishing long-term relationships.
- Material+ "Next Gen Small Business Owners" Survey, July - August 2024. Commissioned by Visa. Online survey of 1,418 SMB Owner and/or Financial Decision Maker (DMs) across 6 countries globally.