The lasting opportunity for Spanish affinity neobanking

An operator friend recently asked if the vertical fintech business model was getting old. Niche interchange plays without scale where any margin goes right back into high CAC? I generally agree with at least one major exception.

The writing IS on the wall for many fintechs in this space... but not for Spanish affinity fintechs.

Far from niche, Spanish language banking is a huge segment. We're talking ~52M ppl in the US (~13% of the population). It's the 2nd highest in the world (bigger than Spain!). And despite general progress across banking apps, it's still incredibly underserved in the US.

There are real problems for this segment in the US financial ecosystem. Few apps localize for Spanish language speakers. Fewer offer specific services that uniquely benefit this demo (non-SSN based KYC, money remittance, financing, credit building, P2P).

Unlike what I saw in most others affinity banking plays, new entrants in this space (Seis, Alza, Maza) are actually providing these value-added services rather than a colorful debit card and some marketing hype.

The silver lining in this cycle is that neobanks that identified "niche segments" that didn't actually need niche products (or those that lazily marketed without value add) are dying off. That leaves space for these kinds of value-add players to have an attempt at making it.

Neobanking has and always will be an incredibly difficult business (Chime just made it look easy), but I'm hopeful that some of these actually make it because this demographic absolutely deserves it.