The failure mode is always the same shape. A firm runs everything through one banking group because that is who said yes. Deposits arrive there, payouts leave there, the payment provider settles there, and the operating costs are paid from the same balance. The bank exits the sector, gives notice, and for the notice period the firm can still receive but the new account is not open yet. Withdrawal queues build. Clients post about it. The complaint pattern reaches the acquirer, and now the card account is under review too.
Nothing in that chain required wrongdoing. It required a single point of failure and a slow substitution.
Redundancy means independent, not duplicated
Two accounts inside the same institution share a risk committee, a correspondent chain and a sector policy. When the policy changes, both go. Real redundancy means separation on at least three axes: different institution, different country, and different correspondent chain for the currencies you actually settle. The third one is invisible unless you ask. Two banks in two countries can clear the same currency through the same correspondent, and when that correspondent withdraws from your jurisdiction, as described in correspondent de-risking, both relationships wobble at the same time.
Ask each institution which correspondent handles your main settlement currencies. Some will tell you. The ones that will not are still worth mapping through the payment details on incoming transfers.
Separate client money from operations, structurally
Where a licence imposes client money rules, segregation is a requirement rather than a design choice, and the account has to be identifiable as client money to the bank. Even where it is not required, keep the split. It protects clients, it makes reconciliation possible, and it means an operational account problem does not touch the balance that funds withdrawals. Read our note on segregation for how the account structure is normally set up.
Electronic money institutions add a variation worth understanding. Funds held with an EMI are typically safeguarded in an account at a credit institution rather than covered by a deposit guarantee scheme, which is a different protection with a different failure profile. Our explainer on safeguarding accounts sets out the mechanism. Using an EMI as one leg of a redundant setup is common and reasonable. Using one as the only home for client money, without understanding how the funds are protected, is not.
Account structures, client money rules and safeguarding regimes differ by licence and country. This is descriptive only. Take your own legal and regulatory advice on how your firm must hold client funds.
A cold account is not redundancy
An account with no activity has two problems. It goes dormant, which triggers its own review and sometimes closure. And it has no transaction history, so the day you push a month of payout volume through it, the monitoring system sees a sudden pattern change on a quiet account and freezes it. That is the outcome you were trying to avoid, arriving on schedule.
Keep every relationship warm: real payments, in both directions, every month, at a share of volume large enough to look like normal use. Rotate a portion of routine settlement through the backup deliberately. Tell each bank you operate multiple relationships and why, because a bank that discovers it during a review reads it as concealment, while a bank that was told at onboarding files it as normal treasury practice.
What has to be portable
Redundancy is worth nothing if the switch takes three weeks of engineering. Four things decide switching speed:
- Bank details held as configuration rather than written into invoices, emails, checkout pages and PDFs, so changing them is one update and not a hunt.
- A reconciliation process that works from a statement file, so a new account can be reconciled the same day it starts receiving.
- Payout instructions that carry an account reference rather than being tied to one rail, so the payments team can redirect a queue without re-entering client data.
- Client communications ready to send, saying which details changed and how to verify them, because a bank detail change email is the single most impersonated message in this industry.
That last point is a fraud control, not an inconvenience. Publish changed bank details inside the authenticated client portal and reference the portal in the email, rather than putting new details in the email itself. The same logic applies on the payments side, where a multi provider setup only helps if routing is a setting rather than a rebuild. Keeping settlement accounts, payout queues and reconciliation in one operational system, which is how the payouts side of the Broker CRM is organised, is what turns a bank switch into an afternoon.
Cost, and the honest limit
Redundancy costs money: minimum balances, monthly fees, duplicated compliance packs, and management time on relationships you barely use. Price it as insurance against a specific event, which is a period of weeks in which you cannot pay clients. For a firm holding client money, that event is existential, so the premium is easy to justify. For a small firm at the start, the honest position is that two full banking relationships may not be achievable at once, and the fallback is one bank plus one regulated payment institution in a different country, with the limitations of each understood and written down. Treasury planning across those balances, covered in treasury management, then becomes a weekly routine rather than a crisis skill.
"Redundancy is not two accounts at the same bank in two currencies. If one committee can close both, you have one bank."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- Two accounts at the same banking group are one relationship, because one committee and one correspondent chain can end both.
- Ask which correspondent clears each settlement currency, and treat that chain as the axis you diversify on.
- A dormant backup account is not redundancy, and pushing sudden volume through a quiet account is what triggers a freeze.
- Make bank details configuration and publish changes inside the client portal, because bank change emails are the most impersonated message in this industry.
Frequently Asked Questions
How many bank accounts should a trading firm hold?
There is no correct number, but the working principle is at least one relationship you could lose without stopping client withdrawals, at a different institution, in a different country, and ideally with a different correspondent chain for your main settlement currencies.
Is an electronic money institution a valid backup?
It can be one leg of a redundant setup, and many firms use one. Funds at an EMI are usually safeguarded at a credit institution rather than covered by a deposit guarantee scheme, so the protection works differently and should be understood and documented before client money depends on it.
Will a bank object to a firm holding accounts elsewhere?
Generally not, if you say so at onboarding. Multiple relationships are ordinary treasury practice. What causes a problem is a bank discovering undisclosed accounts during a review, because that reads as concealment rather than planning.
About the Author
Roman Onta is an Executive Director at SINGUARD. He builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals side by side with his brother Alex Onta, and he helped on the design of eTrader, the division Alex built and leads. His ground is worldwide payment processing, AML compliance and the corporate structures brokers are built on, work the two of them carry together, shaped by executive roles in the UAE and international corporates. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.