Saw this on AltFi
I thought Project Imagine also have Pi1? Isn’t this a Banking-as-a-Service platform in itself? So why are they now contracting ClearBank?
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So Clearbank is providing the banking licence and the various feeds (faster payments etc). Marqueta does card issuing. PI1 is the orchestration layer that brings that all together with a workable bank in a box that can issue cards and basically be in business.
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Exactly, and dozens is the consumer-facing own-brand product on top of that; a product in itself but also something which acts as a proof of concept for PI1.
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Have you given the dozens bonds a go?
I’m getting 5% (admittedly, simple) on about 7k at the moment. Plus, you can withdraw at any time (but lose the current month’s interest), so they’re perfect for emergency cash
They’re not protected in any deposit protection scheme afaik
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The protection is a trustee account. It depends how you feel about that. In my opinion, it’s different protection, rather than stronger/weaker. Only administrative risk during administration, really, if dozens goes under. If someone manages to empty out the trustee account at Barclays or wherever it is, the system has big big problems
Much safer than investments, imo!
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What if Barclays goes under?
Were you around in 2008 and 2009 when RBS, at one time the biggest bank in the world, effectively went bust? Not to mention Northern Rock, HBOS and the LloydsTSB.
Anyway, that wasn’t the question. The question was, if the bank holding a e-money institution’s funds went bust, would customers of the e-money company get their money back?
It was a hypothetical discussion challenging the assertion that the only risk is through Dozens’s collapse.
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Trustee account funds are not part of Barclays’ assets either
So that’s a deal-breaker unless you’re playing around with small sums.
So - why would you? 
Not all bonds are cut from the same cloth.
The discussion above was about investing in stock, now saving rates are so low.
I think the dozens bond - given how it’s set up - is much less risky than investing in stock, plus it’s got a fixed rate and is very easy to redeem, so a solid alternative to savings, eg for your emergency fund.
I think the rhetoric has unfortunately become that anything without FSCS protection is toxic. The irony being, of course, that invested capital is very much at risk. If you’re willing to go from cash savings to stock, you should have no problem with a dozens bond, or even something like Triodos crowdfunding bonds for something less risky in your mix
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But surely must realise that all personal customer funds, along with these trustee accounts, are all ring fenced and entirely separate from the accounts that the banks used to operate.
In those examples you gave, no one lost any money. And is wasn’t because of FSCS protection.
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Thought I’d go back to the source. This is from the FCA’s own website (emphasis mine):
APIs and EMIs must either keep your money separate from their own money, or protect it with an insurance policy or comparable guarantee. This should mean that, if that company becomes insolvent, you get most of your money back.
But it could take longer to be refunded than if your money was in a bank, and some costs are likely to be deducted by the administrator or liquidator of the insolvent company. For that reason, you may not get all your money back.
API = authorised payment institution
EMI = electronic money institution
A pretty explicit warning, from the regulator.
Or, if you like, the Governor of the Bank of England says this:
If [a] firm failed, holders of its ‘money’ would be forced to pursue any recovery through a corporate insolvency procedure, which would neither be quick nor guarantee their funds back.
Seems fairly clear to me that the risk is not with the ‘holding’ bank failing (as I questioned earlier), but with the actual e-money firm (ie. Dozens) going into administration.
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I agree with there.
There are still some advantages, even over and above FSCS protection, of banking with a “too big to fail” bank.
That’s assuming the government will bail out a bank next time.
It might just be more preferable to let it go bust.
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Exactly, it probably would be to let a small bank go bust.
Remember the reason that RBS and others got a full bailout last time was because their potential collapse was seen as an existential threat to the proper functioning of the domestic economy. A small bank wouldn’t be regarded that way.
In addition to being authorised as an e-money institution, Dozens are also authorised as an investment firm. For this reason I believe Dozens would claim money held with them is better safeguarded than money held with a pure e-money firm
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Also, now retail banks are distinct separate entities from their parent companies and investment arms, the collapse of which (the latter two) would undoubtedly cause harm to the UK.
HSBC UK’s collapse (for example) is much easier to allow than that of HSBC plc.
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Was momentarily confused by this news piece:
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I had the same thought when I read that 
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