Safeguarding Audits
Safeguarding audits are now a regulatory requirement for e-money institutions and certain payment institutions.
As the leading payments compliance firm in the UK, you will be confident that you are receiving the correct guidance and peer-benchmarked advice.
Guide
Safeguarding is an area that raises many points of debate and contention within the industry.
What is a safeguarding audit?
Following recent guidance, the Financial Conduct Authority (FCA) now requires e-money institutions and certain payment institutions to have their safeguarding arrangements audited at least once a year.
An annual independent audit of compliance with the safeguarding obligations is required to demonstrate that you are adequately protecting you customers’ funds in the event of potential insolvency.
What does the safeguarding audit involve?
Within the safeguarding audit, we use a combination of document review, sample testing, walkthroughs and interviews with staff to understand how you have set up your arrangements and their effectiveness in practice.
The services are delivered by our own auditors who are both expert in safeguarding and experienced in auditing.
We work in partnership with you to ensure that we provide you with a report that both meets the FCA’s expectations and contributes to your clear aim of protecting your customers’ funds.
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Why choose fscom?
- More than 10 years’ experience in the conduction of safeguarding audits.
- Audits led by senior colleagues who have a deep domain knowledge of safeguarding and are highly experienced in auditing.
- A thorough and independent appraisal of what your firm does well and the highlighting of areas that require your attention.
- Open and engaging communication approach with all staff based on core values of mutual respect, courtesy, patience and flexibility.
A parent company seeking assurance of subsidiary's systems and controls
The parent company is a regulated financial services entity based outside of the UK with an authorised e-money institution in the UK. The subsidiary outsources some important functions to the parent company, including finance. The boards of the parent company and the subsidiary wanted an assessment of the subsidiary's (the EMI's) systems and controls in relation to regulatory compliance.
Solution and results
fscom's regulatory compliance specialist assessed the EMI's safeguarding arrangements, financial resources, latest regulatory returns and communication with clients.
It became clear that the requirements of the UK legislation and guidance were not well understood where the delivery was outsourced to the parent company function.
In addition to providing a detailed written compliance audit report with prioritised recommendations, fscom advised the boards of both entities on their regulatory obligations and next steps, which included reporting the breach to the FCA and developing and implementing a remediation plan.
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If you are looking for a thorough, independent audit of your safeguarding arrangements by the leading experts in the industry, contact us today for a free initial consultation.
