Independent audits to meet FCA requirements, protect customer funds and build long-term trust
In today’s payments landscape, safeguarding is no longer just a compliance box, it’s a business-critical function.
The Financial Conduct Authority (FCA) is raising the bar for safeguarding arrangements across the UK’s payments and e-money sector. Following years of firm failures and delayed customer redress, the regulator is now mandating stricter controls, greater transparency and independent assurance on how firms protect customer funds.
With the release of Consultation Paper CP24/20, the FCA is introducing new rules that will affect all authorised payment institutions (PIs) and electronic money institutions (EMIs) including:
- mandatory safeguarding audits submitted annually to the FCA
- daily reconciliation and segregation of customer funds
- clear board-level responsibility for safeguarding oversight
- detailed safeguarding policies, documentation, and resolution planning
Whether your firm is scaling, restructuring or already well-established, Moore Kingston Smith’s specialist safeguarding audit service helps you meet these requirements with confidence.
What is a safeguarding audit service?
A safeguarding audit provides an independent opinion on whether your firm’s safeguarding arrangements:
- align with the requirements of the Payment Services Regulations 2017 or Electronic Money Regulations 2011;
- are operating effectively in practice, not just in policy;
- would support a timely return of customer funds in the event of firm failure;
- are sufficiently documented and embedded across the business.
Under the proposed CP24/20 rules, your audit must be carried out annually by an independent auditor and submitted to the FCA, even if your firm is not subject to statutory audit.
Our safeguarding audit service includes:
1. In-depth review of safeguarding methodology
We examine how your firm determines which funds are “relevant”, how they are received, and how they are segregated, whether via dedicated bank accounts, insurance or comparable guarantees.
2. Testing of fund segregation and reconciliations
We test the timeliness, accuracy and completeness of your reconciliation processes, including:
- Daily internal and external reconciliations
- Handling of discrepancies
- Use of safeguarding accounts and interest income treatment
3. Evaluation of systems, documentation and oversight
We assess your safeguarding policy, resolution pack, recordkeeping and governance structures. Is board oversight clear? Are roles documented? Is your control environment robust?
4. Third-party and supply chain risk
We review your oversight of safeguarding agents, distributors and bank providers, all key areas under FCA scrutiny. Are you managing safeguarding risks across the full value chain?
5. Independent audit report for the FCA
We provide a clear, actionable opinion in a format suitable for FCA submission. Our findings will help you identify weaknesses early and strengthen your control environment proactively.
Who should engage us?
Our service is designed for:
- Authorised PIs and EMIs seeking to meet annual audit obligations.
- High-growth firms scaling their operations or entering new markets.
- Firms preparing for FCA scrutiny or a Section 166 skilled person review.
- Firms with agent / distributor networks requiring clearer oversight and controls.
- New applicants establishing safeguarding frameworks as part of their regulatory application.
Whether you operate a wallet product, remittance service, B2B payment platform or embedded finance solution, we tailor our audit approach to your business model.
Why Moore Kingston Smith?
At Moore Kingston Smith, we bring together deep regulatory insight, fintech sector knowledge and practical audit expertise to deliver safeguarding audits that are:
Clear and rigorous
We follow FCA guidance and audit standards to provide assurance that stands up to regulatory challenge.
Collaborative
We work with your finance, compliance, and operations teams to ensure findings are understood and improvements are achievable.
Forward-looking
We don’t just assess today’s risks; we help you prepare for future regulatory expectations, including the end-state changes under CP24/20.
Fintech-savvy
Our Financial Services Group works with leading names in payments, e-money and AI-driven finance. We speak your language.
What’s the timeline?
Safeguarding audits must be completed within four months of your firm’s accounting year-end. With new FCA rules coming into effect as early as 2025, now is the time to get ahead.
We recommend:
- Starting your safeguarding audit engagement at least two months before your deadline.
- Conducting a pre-audit health check, especially if this is your first time undergoing an independent review.
- Engaging an auditor early to avoid bottlenecks during peak audit periods.
Get started with a safeguarding audit that adds real value
Whether you’re preparing for your first safeguarding audit or looking to improve on last year’s findings, Moore Kingston Smith is ready to support you. Contact us today.
