Your financial peace of mind

Kristo Käärmann
02.07.21
2 minute read

Over the last few weeks you might’ve received a few emails from other financial brands you hold money with. This is because the Financial Conduct Authority (FCA) has asked all Electronic Money Institutions (EMI) in the UK to tell their customers exactly how they protect money.

Good thing is, at Wise we believe in radical transparency anyway. So we believe you should not only know how we keep your money safe, but also where we keep your money, and what would happen if something does go wrong.

Here’s what you need to know:

We safeguard your money
Safeguarding means that we keep 100% of the money you have in your Wise account completely separate from the funds we use to run our business. These funds are called ‘safeguarded funds’.

Wise uses two approaches to safeguard your funds, in keeping with FCA regulations. We deposit your funds at regulated banking institutions and also invest in high quality liquid assets, primarily government bonds.

As of the 25th June 2021, we safeguarded your funds as follows:

TypeInstitution*CountryDistribution
Cash DepositJPMORGAN CHASE BANK, N.AUnited Kingdom18.68%
RBS INTERNATIONAL (LONDON)United Kingdom12.89%
BARCLAYS BANK PLCUnited Kingdom12.48%
ADYEN N.V.Netherlands1.82%
DEUTSCHE BANK AGGermany0.92%
AS LHV PankEstonia0.53%
Government backed bondsUS and UKHeld in the UK52.68%

*Please note that the Financial Institutions listed above are not responsible for managing the funds within Wise’s safeguarding accounts or for ensuring that the correct amount of money is being safeguarded. That's Wise's responsibility as an authorised Electronic Money Institution.

Currently, around half of your funds are safeguarded in bank accounts at different financial institutions and in the US, the UK and Europe in order to reduce concentration risk. We assess the credit worthiness of all our safeguarding partners and ensure that no single partner safeguards all our customer funds.

To even further reduce risk we currently invest the other half of your funds in government backed liquid assets. These are classified by our regulators as low risk. They don’t have a high return, but do help to cover some of the costs of a very low or even negative interest rate for holding your money with Wise.

Banks don’t safeguard, they insure
Instead of having to safeguard their customers’ money, banks are required to participate in a financial protection scheme. Unlike Wise, banks lend out the money deposited by their customers. If a large number of borrowers are unable to repay their loans then a bank may become insolvent and be unable to return customer funds. This is why the government makes them insure their deposits via FSCS in case something goes wrong.

What would happen if Wise became insolvent?
If anything were to happen to Wise, we’d return your money as quickly and as fully as possible. All of your funds are safeguarded, but some of this money might be used by an insolvency administrator to pay for their own costs. This means the money returned to you could be lower than the total amount you had in your account.

We don’t want to go out of business, and certainly not in an insolvent way. We hold regulatory capital to protect Wise, and your money, against any unexpected market events. We also carry out regular stress testing of our business and how we operate.

We want to make international banking more transparent
We’re humbled that 10 million of you already rely on us to help you lead your international lives and trust us to hold over 3.7 billion GBP in customer funds. We can’t wait to bring the next 100 million of you with us as we continue to build a new, fair, and transparent world of money.

Onwards.

Learn more about how we keep your money safe
We published a few articles in our help centre in case you want to learn more about safeguarding, who the FCA is, or what would happen if Wise became insolvent.

Wise is the smart, new way to send money abroad.

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