What is a governance & risk management audit?

A governance & risk management audit reviews how an organization is governed — board structure, oversight, accountability — and how risks are identified, managed, escalated and mitigated in accordance with internal policy and regulatory requirements.

Why is governance structure important for SPIs?

Strong governance ensures clarity in roles and accountability, oversight over compliance and risk, proper decision-making, transparency, and helps to satisfy regulatory expectations.

What is assessed in a risk framework assessment?

Risk framework assessment examines how the institution identifies, measures, monitors, reports, and mitigates risks — including financial crime, operational, reputational, regulatory risks — and the quality of escalation and oversight.

Do you review policies and procedures as part of governance audit?

Yes, reviewing policies and procedures helps ensure that documented rules reflect practice, regulatory requirements, are up to date, and that staff understand and follow them.

What are internal controls & oversight testing in this audit?

This includes checking whether controls such as segregation of duties, approval hierarchies, supervisory reviews, monitoring, and oversight functions are in place and functioning as designed.

How is risk reporting and escalation assessed?

We evaluate how risk information is reported to senior management or the board, how incidents or issues are escalated, whether there are mechanisms for corrective action, and how often reviews happen.

What happens after gap analysis?

After identifying gaps, we deliver recommendations, a remediation plan, timelines and assist in implementing improvements to governance and risk management framework.

How often should governance & risk audits be conducted?

It depends on organisation size, regulatory expectations, changes in business operations or environment. Typically annually or whenever significant changes in regulation or business structure occur.

Governance & Risk Management Audit

Strong governance and robust risk management are cornerstones of regulatory compliance and operational resilience for Small Payment Institutions (SPIs). Regulators such as the FCA expect firms to demonstrate effective oversight, clearly defined responsibilities, and proactive risk management frameworks that can withstand scrutiny and adapt to evolving threats.

At ABM Global, our Governance & Risk Management Audit provides an independent, structured assessment of your SPI’s governance structures, risk protocols, and operational controls, ensuring your firm operates efficiently, transparently, and in line with regulatory expectations.

ABM’s Governance & Risk Management Audit Includes

1. Governance Structure Review

Evaluation of board composition, committees, and reporting lines to ensure clarity of roles and responsibilities.
Assessment of senior management accountability under the FCA’s SM&CR (Senior Managers & Certification Regime).
Verification of decision-making processes and approval hierarchies to promote effective oversight and operational accountability.

2. Risk Assessment Framework Evaluation

Review of the firm’s risk identification, assessment, and mitigation processes, covering financial, operational, regulatory, and reputational risks.
Assessment of risk appetite statements, internal risk registers, and escalation procedures.
Ensuring risk management practices are aligned with FCA expectations and industry best practices.

3. Operational Controls Assessment

Examination of key operational procedures including payment processing, client onboarding, transaction monitoring, and safeguarding of funds
Verification of control effectiveness, segregation of duties, and mitigation measures for fraud, money laundering, and operational failures.
Evaluation of internal reporting, exception handling, and compliance monitoring mechanisms.

4. Compliance Integration

5. Gap Analysis & Recommendations

Identification of deficiencies, weaknesses, or inefficiencies in governance, risk, and operational control frameworks.
Practical, actionable recommendations to enhance oversight, strengthen risk mitigation, and ensure compliance readiness.
Support in implementing enhancements to improve resilience and regulatory confidence.

6. Regulatory Inspection Preparedness

Assistance in preparing for FCA inspections, thematic reviews, or internal audits.
Compilation of governance documents, risk reports, and evidence of controls to demonstrate operational robustness and regulatory alignment.
Guidance for senior management and staff on presenting governance and risk frameworks effectively to regulators.