SAFEGUARDING AUDITS.
Independent safeguarding reviews that assess compliance, strengthen controls, and support regulatory readiness.
Safeguarding is the cornerstone of customer protection for payment services and e-money firms which is why it remains a key area of FCA scrutiny. For all Electronic Money Institutions (EMI) and Payment Institutions (PI) required to arrange an annual audit under the Companies Act 2006, a Safeguarding Audit is mandatory.
More than a regulatory tick-box, it demonstrates that your firm can be trusted to protect client funds, maintain operational resilience, and meet FCA expectations.
MINIMISE BURDEN, MAXIMISE ASSURANCE.
As one of the UK’s most experienced digital finance compliance consultancies, we deliver independent safeguarding audits that are regulator-aligned, commercially focused. Our audit methodology has been refined through extensive experience and shared directly with the FCA, giving you confidence that the scope covers the issues most critical in meeting your obligations.
We combine regulatory expertise with practical insight, ensuring the audit process is efficient, thorough, and delivers recommendations that strengthen both compliance and business resilience. From initial workshops through to the final report, we help you anticipate and address issues before they become regulatory concerns.
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REVIEW
We begin with a workshop to understand your safeguarding arrangements, supported by a tailored online questionnaire to streamline data collection. We then review your policies, procedures, and records covering safeguarding methods, reconciliations, governance, stress testing, and wind-down planning.
REALITY CHECK
Our experts sample-test reconciliations, examine systems and controls, and interview key staff to ensure that safeguarding processes aren’t just documented, but operating effectively in practice. This approach provides a clear, evidence-based view of your compliance with FCA requirements.
REPORTING
You receive a draft summary of findings with the opportunity to clarify points before we issue the final Safeguarding Audit Report. This report sets out our independent opinion on whether your firm has met FCA expectations, identifies shortcomings, and provides practical solutions and recommendations to address them and close outstanding items.
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FREQUENTLY ASKED QUESTIONS
Find answers to the questions we’re asked most often, from our compliance and training services to how we can support your business.
What is a safeguarding audit and who needs one?
A safeguarding audit is a mandatory independent review required for all Electronic Money Institutions (EMIs) and Payment Institutions (PIs) that are required to arrange an annual audit under the Companies Act 2006. It assesses whether a firm's safeguarding arrangements meet FCA requirements for protecting client funds held in the course of payment services or e-money activities.
What does a safeguarding audit assess?
A safeguarding audit assesses the adequacy of a firm's safeguarding arrangements, including the segregation of client funds, the suitability of safeguarding accounts and custodians, the robustness of internal controls, and the accuracy of safeguarding calculations and records. It also evaluates the firm's operational resilience and its ability to meet FCA expectations on an ongoing basis.
Why is safeguarding such a key area of FCA scrutiny for payment firms?
Safeguarding is the cornerstone of customer protection for payment services and e-money firms. The FCA has consistently identified safeguarding as a priority supervisory area, with weaknesses in safeguarding arrangements frequently cited in enforcement actions and supervisory interventions. A robust safeguarding audit demonstrates that a firm can be trusted to protect client funds and maintain operational resilience.
What are the most common safeguarding audit findings?
Common findings include inadequate segregation of client funds, inaccurate safeguarding calculations, unsuitable safeguarding accounts or custodians, insufficient internal controls, and poor record-keeping. Identifying and addressing these issues proactively is critical to maintaining FCA compliance and avoiding regulatory intervention.
How can Cosegic support our annual safeguarding audit?
As one of the UK's most experienced digital finance compliance consultancies, Cosegic delivers independent safeguarding audits that are regulator-aligned and commercially focused. Our audit methodology has been refined through extensive experience and shared directly with the FCA, giving firms confidence that the scope covers the issues most critical to meeting their obligations.