South Park Commons and FJ Labs joined Costanoa Ventures in leading the round.The company intends to make use of the money to create a financial hub that offers more tools and solutions for Latino immigrants in the US.
Contrary to conventional banks, Comun provides all aspects of the banking experience in Spanish, eliminating one of the main barriers for the Latino community to accessing the necessary financial services. Comun provides Latino immigrants access to traditional financial services including a checking account connected to a physical and virtual Visa debit card, direct deposits for payroll and free ATM withdrawals and deposits, but without requiring a social security number or any additional or hidden fees. To participate in the financial system and develop financial stability, a checking account is essential.
Customers can access educational content to help them manage their money more effectively for long-term financial progress in addition to the user-friendly tools and resources offered through the Comun mobile app.
Despite the fact that 44 million Latinos in the US speak Spanish as their first language, no established bank provides a complete Spanish language banking experience. Latinos are twice as likely to be victims of predatory lending and three times as likely to be unbanked. Currently, 41% of Latinos do not have a credit score, which restricts their ability to advance financially. Despite having a GDP of USD 2.8 trillion, or the equivalent of the fifth-largest economy in the world, Latinos in the US still face discrimination.
For families to be financially secure and have the ability to put money down and invest for the future, they must have access to high-quality financial services that are also affordable. Additionally, the financial exclusion of low-income people and people of colour, together with the decreased chances for savings and investment that follow, hinders not only the development of wealth in such communities but also the expansion of the economy as a whole.
Fintech is one strategy to increase financial inclusion and thereby enhance economic results for all American households.
Fintechs made the decision to take action and alter how minorities are treated because discrimination in the banking industry against low-income and communities of colour has long since become an outdated reality and manifested itself in many different ways.
Comun is not the first fintech to focus on serving the needs of the Hispanic community. In 2020, Fortú was released, being developed on the payment processing platform offered by Galileo. In order to satisfy the banking needs of Latinos and Hispanics in the US, Fortú, like Comun, focuses on developing culturally relevant financial services.
A five-year deal was also inked between Cuentas and Western Union in February 2021 to incorporate digital money transfer services into the Cuentas mobile app and digital wallet. The Cuentas mobile app services offer a financial solution for the underbanked, unbanked, and underserved US Hispanic and Latino community by giving those who are unable to open a traditional bank account or who would rather not bank at a traditional financial institution access to the US financial system.
Finally, in March 2021, a digital banking startup called Greenwood secured USD 40 million from a variety of US financial institutions. Greenwood was created for Black and Latino customers and businesses.
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