What is a Safeguard Audit for APIs?

A Safeguard Audit for APIs is a review to ensure that customer funds are properly protected, reconciled, and handled under regulatory safeguarding obligations, assessing controls, oversight, and compliance with relevant laws.

Why is reconciliation of customer funds important?

Reconciliation ensures that the amounts held on behalf of customers match records, that no misappropriation or misallocation occurs, and that operations comply with regulatory safeguarding requirements.

What policies & controls are evaluated in a Safeguard Audit?

Policies & controls assessed typically include segregation of customer funds, internal procedures for safeguarding, oversight roles, access restrictions, audit trails, and controls around movements of funds.

How is operational control testing done?

Operational testing involves sampling transactions, reviewing logs, verifying access rights, checking whether funding flows follow approved procedures, and testing controls for effectiveness.

What is gap analysis in the context of safeguarding?

Gap analysis compares existing practices with regulatory requirements or industry best practices to locate deficiencies, risks, or non-compliant procedures needing remediation.

Is remediation planning part of the audit?

Yes, a key output is a remediation plan which details recommended changes, responsibilities, timing, and controls to be implemented to improve safeguarding compliance.

Do you verify remediation after implementation?

Yes — follow-up verification ensures that the recommended actions have been properly executed and that safeguarding controls now operate as intended.

Who should see the Safeguard Audit findings?

Findings are generally shared with senior management, compliance, risk oversight teams, and where required, board committees to ensure awareness, accountability and action.

API Safeguard Audit | E-Money / MSB Compliance

Safeguard Audit

For Authorised Payment Institutions, safeguarding client funds is a critical regulatory requirement under the FCA’s Payment Services Regulations (PSRs). Proper safeguarding ensures that client money is protected from misuse, operational errors, or insolvency risks, thereby maintaining trust and credibility in the payments sector. ABM Global’s Safeguard Audit provides a thorough, independent assessment of your client fund protection measures, ensuring full compliance with regulatory obligations and operational best practices

Client Fund Segregation and Account Management

We review how client funds are segregated from the firm’s own money and assess the management of safeguarding accounts. Our audit examines account structures, reconciliation processes, and record-keeping practices to ensure that funds are accurately tracked, fully protected, and readily identifiable in the event of internal or external scrutiny.

Reconciliation and Transaction Oversight

ABM evaluates the frequency, accuracy, and effectiveness of reconciliation processes between operational accounts and safeguarding accounts. This includes verifying that all client transactions are properly recorded and reconciled, and that any discrepancies are promptly investigated and resolved. We ensure that processes meet FCA expectations for transparency, traceability, and accountability.

Operational Controls and Risk Management

Our audit examines internal controls and operational procedures that govern client fund management. We assess authorization protocols, dual control processes, risk mitigation measures, and monitoring practices to verify that safeguarding operations are robust, reliable, and resistant to errors or misuse.

Regulatory Compliance Assessment

ABM ensures that your safeguarding framework aligns with FCA requirements, PSRs, and industry best practices. We review policies, procedures, and governance arrangements, providing confidence that your firm is fully compliant with safeguarding obligations. This includes preparing for regulatory inspections and demonstrating operational integrity to auditors or supervisors.

Gap Analysis and Recommendations

The audit identifies potential gaps, weaknesses, or inefficiencies in safeguarding arrangements. ABM provides actionable recommendations to enhance controls, strengthen risk management, and ensure that client funds are fully protected at all times.

Ongoing Monitoring and Support

Beyond the audit, ABM offers guidance on continuous monitoring, process improvements, and updates to safeguarding practices. Our approach ensures that your API maintains dynamic, regulator-ready controls, capable of adapting to operational growth, evolving regulations, and emerging risks.