The short answer is YES. We are committed and required to keep your money safe.
But how do we do this?
Banks are required by the government to ensure customer funds via FSCS. This is because banks lend out customers' money and in case borrowers cannot manage to pay back the loans, they might become insolvent. If you hold money with a UK-authorised bank, building society, or credit union that fails, FSCS automatically compensate you:
up to £85,000 per eligible person, per bank, building society, or credit union.
up to £170,000 for joint accounts.
KIXY, however, is not a bank. We are an Electronic Money Directive agent (EMD agent), regulated by the FCA. In line with FCA's regulations, EMD agents must comply with safeguarding requirements to protect customers' funds. This means that your money is held in a separate account from the accounts that we use to run the business. In each safeguarded account there are individual client accounts that provide more security for you.
The FCA has provided more in-depth information on safeguarding.
Where do we keep your money?
We keep the money deposited to your multi-currency and GBP accounts in low-risk UK and European banking institutions.
Why do you safeguard at different financial institutions?
Well, simply put, because we don’t want to put all our eggs in one basket. Rather, we try to reduce concentration risk by safeguarding the funds at various financial institutions in the UK and Europe. We regularly assess our partners' creditworthiness and would change banks if any issues were detected.
However, if any of the banks where we safeguard your money were to become insolvent, then we wouldn’t be able to guarantee the return of all of your money.
What if we were to become insolvent?
As mentioned above, your money is not accessible to creditors or other third parties. However, if we were to become insolvent, we will need to use some of this money to pay insolvency administration fees; which means the money you will receive back will not always be the exact amount you deposited.
It goes without saying that for the best interests of ourselves as well as our customers, we do our best to make sure funds are safeguarded.