Launch HN: Pana (YC S22) – Social Trust Banking with a US Latino Focus
Hey HN! We are Piero and Luis, co-founders at Pana (https://joinpana.com), a banking app that uses social trust to help people save money and access healthier and better financial products. We’re open to everyone, but are focusing on the 62M Latinos in the USA, a particularly under-served market that we know a lot about.

US Hispanics have largely been ignored by traditional banks [1], resulting in 5% of this population being unbanked and an additional 13% underbanked. This is mainly due to cultural differences and lack of trust, as well as in-person and Social Security Number requirements that exclude a significant number of people.

Why is this market under-served? In Latino communities, a lot of transactions take place within family and personal networks based on trust. But this trust network isn't connected to the standard banking system, and therefore they don't get access to the financial products they should, if their creditworthiness were evaluated properly.

In addition to remittances, Latinos commonly lend amongst each other. Lending circles are an example of trust and credit-worthiness currently outside the formal financial system, and are common among US Hispanics (e.g. [2]).

We’re working on a new “social banking” concept that is designed to be a better fit for the trust-based behaviors that are common and familiar to this community. Of course, everyone is welcome! But we believe that social banking is especially applicable to the US Latino market, so we’re focusing there for now.

It’s worth adding that a proper evaluation of trust-based payment behavior should help us lend to people who are currently being abused by predatory rates.

The inspiration for Pana came during my time as head of Scotiabank’s Caribbean & Central America Digital Factory, where I saw the power of building digital banking products for the Hispanic market. In stark contrast, I was surprised to learn on a trip to the US that without a Social Security Number I had to visit a traditional branch. After numerous signatures and hours of waiting, I was finally able to open the account—and then handed an ATM card instead of a debit card which would only allow me to do cash withdrawals and not the ability to make purchases. Adding insult to injury, I could never reach the bank officer again for support.

Because this was so surprising to me, I checked with friends and family, and all of them shared similar experiences. “Lack of trust,” “high fees,” and “cultural differences” were words I heard repeatedly.

It isn’t just end-customers who struggle with this system. Employers and sellers transacting with the 12M people living in the U.S. without a Social Security Number have to rely on cumbersome paper checks, cash or money order, and seriously, you have no idea how complicated it still is to perform basic transactions like sending money abroad.

Encountering this broken situation made me realize that a new startup would be best positioned to fix it. I had already, working with a team that’s knowledgeable about the Hispanic market, built digital banking solutions solving some of these issues—but only for big banks; smaller institutions tend to lack the scale, technology, and reach. However, the big banks are the ones who ignore this demographic in the first place because they have “bigger fish to fry”—a catch-22! The market, however, is easily large enough to support a new business, so we decided to build it ourselves.

With Pana, we’re applying the functionality and community-building aspects of familiar apps like WhatsApp to the banking space. Today, Whatsapp is widespread in the US Latino market -specially around informal peer-to-peer financial transactions-, proving that when one tool catches on, it will probably become the norm across this diaspora. We’re building on the social trust strongly embedded within the Latino culture to help achieve personal financial goals. Individuals can choose to share milestones and celebrate achievements with close friends or public groups of peers with similar needs. Within a group, payments and requests for payment among users can be made.

If this works, banking on social trust could potentially disrupt the $320B in yearly transactions through Alternative Financial Services (money orders, check cashers, payday loans, etc.), and who knows, maybe eventually the banking industry as a whole!

Latinos represent the fastest-growing diaspora in the USA with a 1.7T buying power and are often forgotten—in part, because we are not compelled to use existing banking products and therefore, no one can see how trustworthy many of us really are. We're now on a mission to remove these financial barriers.

We really hope you guys check out Pana and tell us any feedback you might have, and we look forward to your comments!

[1] https://www.federalreserve.gov/publications/2021-economic-we...

[2] https://www.npr.org/sections/codeswitch/2014/04/01/292580644...