Miami-based challenger bank Fortú launched recently to cater to the banking needs of Latinos and Hispanics in the US. Fortú was founded by Charles Yim, a former Amazon Web Services and Google executive, and Apolo Doca, who previously helped build Lemon Bank, a Brazilian digital bank acquired by Banco do Brasil. Fortú has spent the last year developing its services in stealth mode, and has raised $5 million during this time.
The current U.S. banking system is not well-suited to serve Latinos, according to Fortú CEO Charles Yim. Since 1970, the Latino population has grown five times faster than the non-Latino population, and the U.S. is becoming increasingly English-Spanish bilingual. However, the regulatory frameworks surrounding banks were not designed to anticipate this demographic and cultural shift.
“Latinos are two to three times more likely to be unbanked or underbanked than non-Latinos, regardless of socio-economic indicators such as household income, education level, or nativity and immigration status,” said Yim. “We believe a large part of the problem is the lack of cultural context from financial institutions. Very few, if any, banks are focused on designing products and services around the financial needs of Latinos,” said Yim.
Fortú has therefore tried to develop a culturally contextual digital banking platform for Latinos. “We aim to understand a customer’s language preferences, level of acculturation, geography, cross-border ties, and household financial patterns, to provide the most relevant services for their individual financial needs,” said Yim.
Fortú offers bilingual (English/Spanish) iOS and Android apps, and a contactless Mastercard debit card that is compatible with Google Pay, Apple Pay and Samsung Pay. The Fortú account has no monthly fee or minimum balance, and is available to all U.S. residents with proof of address, including those without social security numbers.
In order to facilitate Latinos in the U.S. who regularly send cross-border remittances, Fortú has partnered with Wise to enable its users to send international remittances from within the Fortú app. Customers can send money to over 50 countries, including 8 in Latin America. “As we are directly integrated with Wise, our customers often experience near real-time or same-day settlements,” said Yim. “We have seen transfers from the U.S. to Mexico, Colombia, and Brazil settle in under an hour.”
Eliminating Latino banking disparity in the U.S. is a personal goal for the Fortú team, according to Yim. The team consists of many first- and second-generation immigrants with personal ties in Latin American countries including Brazil, Colombia and Mexico. “Fortú is a labor of love for our team – a group of foreign nationals, native-born and naturalized American citizens who are former expats and immigrants from Latin America,” said Yim. “We have deep ties across the region, and we’ve all personally experienced or witnessed friends and family deal with the challenges of being Latino and navigating the U.S. banking system.”
Fortú is built on the Galileo platform, a card-issuing and payments processing company that supports fintechs and challenger banks by simplifying payment processing. Galileo’s clients include Chime, Paysafe and KOHO, as well as Latin American fintechs such as Klar and Ualá.
“Fortú uses our APIs, bank-grade back-office capabilities and connectivity to additional partners (such as card manufacturers and payments networks) to create accounts, issue cards and offer differentiated features to its target audience,” explained Clay Wilkes, CEO of Galileo. "This enables Fortú to fully focus on delivering a custom user experience through its app."
Wilkes believes that Fortú stands out from other neobanks today because of its singular focus on providing financial services to one culturally distinct demographic. “Just recently, we’ve started to recognize that in this nation of immigrants, people’s views on financial services may be influenced by cultural factors, whether they were born outside the U.S. or brought up in a household excluded from the financial mainstream,” said Wilkes. “Drawing heavily on their own life experiences, Charles and Apolo have turned this recognition of financial otherness into a mission of financial inclusivity for Latinos who might otherwise feel excluded from the system.”
The trend of neobanks like Fortú targeting underserved or overlooked niche markets is likely to grow in the near future, according to Frank Rotman, founding partner at venture capital firm QED Investors. “If we were to look 5-10 years into the future, it’s easy to imagine financial institutions breaking from the mold of being ‘all things to all people at all times in all channels’, and instead offering a curated suite of products that matter to a specific target customer base through digital channels.”
“A less comprehensive catalog of offerings often allows for the delivery of more world-class relevant products.”