Sure the latest initiatives from the Teslas, Apples and Googles of the industry tend to dominate the tech news space — and with good reason. Still, the tech titans aren’t the only ones bringing innovation to the sector.
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When Abiel Gutierrez and Andres Santos came to the U.S. to study at some of the country’s top universities, they quickly realized the difficulties Latino immigrants face when signing up for a bank account.
Most banks require a social security number and a minimum balance and cater to English-speaking customers. Instead of going through these hoops, some Latino immigrants turn to check-cashing stores and money orders that take a considerable cut of their earnings. Gutierrez and Santos also learned through user interviews that community members will loan each other money before going to an outside institution.
“There’s a lot of underground financial movement happening in the community that is obviously risky and shouldn’t happen in an ideal state,” Santos said. “But it shows how there is not a lot of trust for financial institutions.”
A FDIC survey from 2021 found that 9.3 percent of Hispanic individuals are unbanked compared to 2.1 percent of white individuals. Among those who earn between $15,000 and $30,000, nearly 16 percent of Hispanic people are unbanked compared to 4.2 percent of white people. About 8.5 percent of Hispanic people who earn between $30,000 and $50,000 per year are unbanked compared to 1.7 percent of white people.
Gutierrez and Santos founded neobank startup Comun in 2021 to address the pain points of Latino immigrants and help them join the financial system. Comun, which translates to “common” or “communal,” helps Latino immigrants build credit and establish a taxpayer identification number, which can be helpful if they apply for U.S. citizenship.
Unlike traditional banks and other financial institutions, Comun doesn’t require a social security number for its users. To open a checking account, users must provide a passport and proof of address, such as an electricity bill.
Not only are they preying on Hispanics with fees, they are increasing the distrust that the Hispanics have with the entire financial system.”
Comun also offers a Spanish-first online banking experience and customer support representatives. This is important, Gutierrez said, because many banks that claim to offer Spanish language functionality will eventually lead users to an English application process. He added that most online application processes require nonresidents to apply in person at one of the bank’s branches.
A Comun checking account comes with a Visa debit card and access to the Comun banking app. The checking account can also be used to make and receive payments on Zelle, Venmo, Cash App and other payment platforms.
Comun doesn’t charge users any fees and doesn’t require a minimum balance, which Gutierrez said is a major differentiator from the financial institutions that are currently courting Latino customers.
“A lot of the services that either place themselves physically in Hispanic locations or that cater fully in the Spanish language are predatory,” he said. “They do check cashing. They do shark loans. Not only are they preying on Hispanics with fees, they are increasing the distrust that the Hispanics have with the entire financial system.”
Comun users can deposit money by either setting up direct deposit with their employer or by depositing cash at more than 1,100 ATM machines.
Santos said Comun has quickly gained traction since launching its checking account four months ago. The NYC-based company has picked up new users by partnering with nonprofits, consulates and companies that are already established and trusted in Latino communities.
Comun recently raised a $4.5 million seed round led by Costanoa Ventures with participation from South Park Commons and FJ Labs. Santos said the funding will help grow the company’s 15-person team, particularly its customer support team. Comun also plans to roll out additional financial products this year.
