EMI vs bank: the honest comparison
A bank can lend out your deposits; if it fails, the FSCS protects eligible deposits up to £120,000 per person per authorised firm, a limit raised from £85,000 on 1 December 2025. An EMI cannot lend your money at all: it must safeguard customer funds, held separate from its own money, in designated accounts at credit institutions or in liquid safe assets, so the funds exist to be returned if the EMI fails.
Neither model is “safer” in the abstract; they are different protections. The EMI model’s strength is that your funds are ring-fenced by rule rather than insured after the fact, and since May 2026 the FCA’s new safeguarding regime has tightened exactly how that ring-fencing must operate.
Why modern payment accounts run on EMI licences
The EMI licence is the permission behind most fintech business accounts, multi-currency wallets and named IBANs. It lets a firm issue accounts and move money at software speed while the regulatory perimeter (safeguarding, AML, conduct) stays enforced by the FCA.
When you open a “business account” with a fintech, the useful question is: which EMI issues it, and what is its FCA firm reference number? Any provider should answer instantly, and you can check the answer on the register yourself.