Creator Economy and Banks: from arrogance to partnerships

In 2024, the top 50 creators earned nearly $720m, demonstrating this sector’s financial potential. For example, Visa Corp., as a large and influential player in this space, has officially recognised creators as a small business, and this could be a signal to traditional financial institutions to take a closer look at the creator economy and industry.

The creator economy is indeed projected to reach a $500bn market in the near future. This rapid expansion presents huge opportunities for both creators and the companies that support them.

As the industry grows, content creators are earning more, leading to a greater need for financial tools tailored to their specific needs. This is where fintech comes in. There’s a growing demand for financial products designed to help creators manage their income, expenses, and investments. This could include things like specialised payment platforms, tax management tools, and even lending options designed for creators.

What financial challenges does the content creator industry face?

Admitting that the creator economy has already proven its viability and demonstrated many signs of ongoing organic growth, many brick-and-mortar banks complain that the biggest challenge they are facing is not anything numerical or even material but rather purely perceptional. Once again, many global financial institutions are still reluctant to recognise this important economic phenomenon, even though such numbers point to its successful development. Many creators feel their greatest challenges could be alleviated once they are legitimised. A few of the most annoying headwinds are listed below:

• Limited access to credit: Many creators don’t have a traditional track record, making it difficult to get financing.

• High transaction fees: Traditional financial products are not adapted to the frequent micropayments that characterise the creator economy.

• Lengthy payment processing: Delayed payments negatively impact creators’ liquidity.

• Fraud risks: There is a high probability of chargebacks, payment delays, and fraud, which traditional banks are not always prepared to handle due to the specifics of the industry (large sums are often made up of many small payments).

• Other risks: When it comes to small non-recurrent transactions, typical for royalties and commissions, there is a high risk of chargebacks, delayed payments, and even fraud, which traditional banks are not always prepared to deal with due to the specifics of the industry (lump sums are often split into many small payments).

Why did banks often ignore creators and why did they finally change their minds?

Previously, content creators were perceived as amateurs rather than valid businesses.

Their lack of a structured financial history made them less attractive to lenders. Traditional financial products, such as business loans or credit lines, are designed for companies with consistent revenue and documented sales. However, creators often don’t align with that model.

Today online platforms like YouTube or Patreon generate billions of dollars, and their users generate significant revenues making a profound economic impact. As a result, the influencer ecosystem in India over the last four years grew from just 962,000 influencers in 2020 to 4.06 million creators in 2024, representing a more than 320% hike. In an apparent response to this, in 2024, several banks in India launched specialised financial solutions for content creators, underscoring the need for innovation in the banking sector.

How can banks bridge this gap?

Most bank managers still think creators don’t enjoy stable income streams, making qualifying for traditional loans difficult. However, this approach is changing. Many financial institutions simply feel FOMO (fear of missing out) and began offering adapted banking products, such as variable income adjusted loans, flexible lending models and accompanying financial services. However, banks must develop new risk assessment models that consider diverse income sources like brand deals, ad revenue, and subscriptions.

Having said that, most traditional banks are too shy to recognise the creator economy openly because they perceive the creator business as purely underground fintech. So, the participation of such a big player as Visa International must be seen as an achievement for this emerging industry.

What should specialised financial services for creators include?

• Most importantly, traditional banks should focus on catering to accelerated payment processing, instant transactions, and income-backed financing, including factoring.

• Also, banks should address creating accounts with features designed for creators, such as automated invoicing, expense tracking, and tax withholding.

• Another important step is launching education programs: Financial literacy for content creators is key to helping them better manage their incomes and liabilities.

• Yet one more important issue. Many creators lack access to benefits like health insurance and retirement plans. Banks can partner with providers to offer tailored solutions.

• And last but not least, since many creators deal with various online monetisation platforms and channels such as YouTube, Instagram, or Patreon, financial institutions should partner with them to streamline payments, and access and analyse corresponding financial data.

The content creator economy is not just a niche market but a fast-growing sector with increasing financial clout. Banks that fail to adapt risk losing a significant customer base to fintech companies. Financial institutions must innovate, offer specialised solutions, and actively work with the fintech community to retain their competitive edge.

So, active partnerships liaising with banks and fintech startups to develop and integrate innovative financial solutions are increasingly designed to meet the needs of content creators as highly welcomed customers.

Murad Salikhov is a serial investor and the Co-Founder of Schwarzwald Capital