ID requirements, high fees and a language gap have long been obstacles to prevent some Latino immigrants from opening a bank account in the United States. Commun wants to change that.
New York-based neobank is the latest to provide banking services tailored to the needs of immigrants. While most traditional banks require customers to have a US Social Security card or proof of address, such as a mortgage or utility bill, Comun allows its customers to apply for an account using 100 different types of identification from Latin America , including passports of foreign countries.
Andres Santos and Abiel Gutierrez started Comun in early 2022 to offer digital banking services, including instant payments, check deposits and early payment. They also wanted to give customers access to native Spanish-speaking replays seven days a week.
“Our mission is to bring local banking back to immigrants in the US,” Santos told TechCrunch. “We think it’s a model that’s been dying at an alarming rate for the last 30 years. Basically you’ve seen ‘too big to fail’ banks take most of the share and go from 20,000 banks to less than 5,000 banks.”
Abiel Gutierrez and Andres Santos, co-founders of Comun. Image Credits: Commun
Santos also explained that during this period, some banks have thought about immigrants. However, this group usually does not fit the model of a lead to follow, so they are left behind.
Comun wants to “reimagine what local banking looks like in the digital arena, and that means the community and the unique needs of our community to better serve them with profitable products,” he added.
The bank earns money from deposit interest and also convenience fees for facilitating direct transactions, similar to peer-to-peer transactions. It also launched a direct banking integration last month that Santos said is growing rapidly and “already drives about 25% of our revenue and volume.” Comun will also collect transaction fees once it opens a pilot remittance program that allows immigrants to send money from the US to Latin America.
Comun is not alone in targeting immigrants. It joins companies like Tanda, Bloom Money, Majority, Welcome Tech and Pillar to solve the banking accessibility problem.
It also joins them in raising venture capital for its approach. Today, Comun announced another $4.5 million in funding to raise a total of $9 million. The latest investment was made by Costanoa Ventures with participation from a group of existing investors including Animo Ventures, South Park Commons and FJ Labs.
In addition to offering various identification methods for opening accounts, the company differentiates itself from its competitors through its partnership with Community Federal Savings Bank. By having a direct relationship with the bank, Comun is able to add new services quickly and in compliance, Santos said.
Comun is also developing a large partner network to support cash deposits and withdrawals with more than 90,000 physical locations.
The concept has caught on. Not only did the bank achieve a net promotion score (NPS) of 86, which is more than four times the industry average for customer satisfaction, but Comun is experiencing 60% month-on-month revenue growth. It has processed over $75 million through its platform.
Santos and Gutierrez plan to use the new funds to hire additional employees to scale Comun’s banking services and launch new products, including insurance and eventually credit and underwriting.
