What is a Safeguard Audit for AEMIs?

A Safeguard Audit for an Authorised Electronic Money Institution (AEMI) is a detailed examination of how customer funds are protected, including reconciliations, internal controls, oversight, and compliance with legal safeguarding obligations.

Why is reconciliation of customer funds critical?

Reconciliation ensures that what is held for customers matches internal records, helping prevent misappropriation, errors, or mismatches and ensuring compliance with regulatory standards.

What policies & procedures are evaluated during the audit?

Typically, policies around how funds are held, how segregation is managed, who has access, how records are kept, how discrepancies are handled, and how oversight and audits are conducted.

How are operational controls tested in the context of safeguarding?

Controls are tested by sampling, reviewing processes, verifying access rights, checking audit trails, oversight by management, and observing how day-to-day safeguarding workflows are followed.

What happens if gaps are found in safeguarding controls?

When gaps are identified, the audit will include risk assessment and recommendations with specific remediation actions, responsibilities, timelines, and then verification to ensure those changes are implemented.

Is follow-up verification part of the service?

Yes — part of the audit is verifying that the recommended improvements to safeguarding controls have been put into place and actually work in practice.

Safeguard Audit Services | Protect Client Funds AEMI

Safeguard Audit

Safeguarding client funds is a fundamental obligation for Authorised Electronic Money Institutions (AEMIs) under the Electronic Money Regulations (EMRs) and FCA rules. Effective safeguarding protects customer assets, ensures operational integrity, and maintains trust in the institution. ABM Global conducts an independent and thorough Safeguard Audit to verify that your AEMI maintains robust procedures, compliant account structures, and reliable reconciliation practices.

Segregation of Client Funds

ABM examines how your institution separates client funds from operational or business funds, ensuring dedicated safeguarding accounts are properly established and maintained. We verify that segregation procedures are consistently applied across all accounts and transactions, minimizing the risk of misappropriation or operational errors that could compromise client funds.

Daily Reconciliation & Monitoring

Our audit reviews daily reconciliation processes to ensure that client balances accurately match safeguarded funds. We assess controls for monitoring inflows and outflows, including automated reconciliation systems and exception handling. This step ensures that any discrepancies are identified and resolved promptly, maintaining financial integrity and regulatory compliance.

Safeguarding Account Management & Documentation

ABM evaluates the setup and management of safeguarding accounts, confirming that account structures, mandates, and signatory controls meet regulatory requirements. We also review the adequacy of internal documentation and record-keeping to provide a clear audit trail for regulatory inspections or internal reviews.

Controls for Operational and Financial Risks

We assess internal policies and controls related to safeguarding, including procedures for handling client fund errors, operational disruptions, or unexpected financial events. Recommendations are provided to strengthen control effectiveness, risk mitigation, and operational resilience.

Gap Analysis & Recommendations

Our team identifies any weaknesses or gaps in safeguarding procedures and provides detailed, actionable recommendations. This includes process improvements, enhanced monitoring practices, and updated policies to ensure continuous compliance and protection of client assets.

Regulatory Inspection Preparedness

ABM prepares your institution for FCA audits by reviewing safeguarding documentation, conducting mock inspections, and advising staff on regulatory expectations. This ensures that your AEMI can demonstrate a robust safeguarding framework and operational readiness, instilling confidence in regulators, clients, and stakeholders.