Identification restrictions, expensive fees, and a language barrier have long been obstacles to some Latino immigrants getting bank accounts in the United States. Comun wants to modify this.
Neobank, established in New York, is the latest to provide banking services tailored to the requirements of immigrants. While most conventional banks require users to have a US Social Security card or evidence of residence, such as a mortgage or utility bill, Comun allows consumers to open an account using 100 different kinds of Latin American identification, including foreign passports.
Andres Santos and Abiel Gutierrez founded Comun in early 2022 to offer digital banking services like quick payments, check deposits, and early payouts. They also sought to provide clients access to native Spanish-speaking representatives seven days a week.
“Our mission is to restore local banking to immigrants in the United States,” Santos told Eltrys. “We believe that model has been dying at an alarming rate over the last 30 years. “You’ve effectively seen ‘too large to fail banks’ take the majority of the market and reduce the number of banks from 20,000 to fewer than 5,000.”
Santos further said that several banks considered immigrants at the time. However, since that group does not often match the paradigm of a possible consumer to pursue, they are left behind.
The goal is to “reimagine what local banking looks like in the digital arena, and that means community and the unique needs of our community to better serve them with winning products,” he said in a statement.
The bank earns money from deposit interest as well as convenience fees for enabling quick transactions, which are akin to peer-to-peer transactions. In the last month, it has established a direct banking integration, which Santos claims is developing quickly and is “already driving around 25% of our revenue and volume.” Comun will also charge transaction fees once it launches a remittance scheme that would allow immigrants to transfer money from the United States to Latin America.
Comun is not the only one that targets immigrants. It joins Tanda, Bloom Money, Majority, Welcome Tech, and Pillar in addressing the issue of bank accessibility.
It also joins them in seeking venture financing for its strategy. Comun announced another $4.5 million in fundraising today, bringing its total investment to $9 million. Costanoa Ventures led the current investment, which was joined by a group of previous investors, including Animo Ventures, South Park Commons, and FJ Labs.
In addition to providing numerous ways of identification for account opening, the firm distinguishes itself from its rivals by its connection with Community Federal Savings Bank. Comun is able to implement new services rapidly and in compliance because of its direct contact with the bank, according to Santos.
Comun is also building a huge network of partners with over 90,000 physical locations to assist with cash deposits and withdrawals.
The idea has gained momentum. Not only has the bank earned a net promoter score (NPS) of 86, which is more than four times the industry average for client happiness, but it is also witnessing a 60% month-over-month revenue increase. Its platform has handled more than $75 million.
Santos and Gutierrez want to utilize the extra cash to recruit more people in order to expand Comun’s banking services and develop new products such as insurance and, ultimately, credit and underwriting.
