Safeguarding

Safeguarding

Safeguarding

Safeguarding Review, Global E-Money And Payments Firm


The Challenge
The client, a global payment firm facilitating payments in 80 currencies with requirements to safeguard under e-money and payment services regulations required a review of its Safeguarding processes.  The client required a review of multiple legal entities (including UK, Europe and entities in the Middle East and Asia) including relationships with agents (who bring customers into the firm) as well as partners who make payments on behalf of the firm. The review required covered the full remit of the process from the requirement to interpret and apply regulations through to governance and  the calculation of the amounts to be safeguarded.

 

Protiviti Solution

Value Delivered

Approach
Our approach entailed:
  • Interviews with the firms Legal and Compliance teams to review the process of converting the regulations into Safeguarding policy. This included making an assessment of whether the interpretations were consistent with market practice.
  • Review of client agreements.
  • Review of governance materials, minutes and breach register and escalation policy.
  • Review of the processes to remove fees and firm money from such that funds relevant funds remain appropriately segregated.
  • Review of cashflows across bank accounts
  • Review of the requirements for bank accounts such as naming conventions, due diligence and acknowledgement letters
  • Review of reconciliations policy, the reconciliations themselves and the break escalation protocols
  • Review of calculation of the safeguarding requirement and the calculation of the safeguarding top up / reductions
  • Review of prefunding / float arrangement
Deliverables:
  • We presented the client with a gap analysis and suggested remedial actions
  • We provided the client with ad-hoc advice with respect market standards and ‘what good looks like’
Benefits:
We met the Client’s need as we:
  • Helped senior management obtain clarity over the risks and issues within their processes and helped them to comply fully with their Safeguarding obligations
Skills Used:
We built on our:
  • Proven knowledge and understanding of the payments industry, of the emoney and payment services safeguarding regulations and our awareness of market standards
  • Skills, capabilities and experience of our team

 


Safeguarding Arrangements Review, Merchant Acquirer


The Challenge
The client, a UK e-money firm providing merchant acquiring services via card machines provided to retailers. Client requested a review of safeguarding arrangements to assess compliance against rules, guidance and market practice. The review covered all the aspects of the firm’s safeguarding obligations and arrangements together with the assessment of the operating effectiveness of the controls and identification of the gaps for the future remediation.

 

Protiviti Solution

Value Delivered

Approach
Our approach entailed:
  • Benchmarking firms existing processes to the industry best practice
  • Gap analysis to regulatory requirements
  • System and process review and design
  • Interviews with the key stakeholders, including “follow the money” workshops
  • Testing of design and operation effectiveness on the key elements of safeguarding requirements: reconciliations and safeguarding calculation
  • Review of the main safeguarding documents in place and advice on improvements
  • Review of the main governance meetings and oversight in place over safeguarding obligations
  • Post-review workshops with key stakeholders on the annual safeguarding audit requirements in order to clarify and advise on the actions firm needs to act upon
Deliverables:
  • We presented the client with an Executive Summary together with the Detailed Summary of findings
  • We provided the client with the opportunities for improvement
Benefits:
We met the Client’s need as we:
  • Helped senior management obtain clarity over the gaps within their safeguarding arrangements and obligations
  • Provided guidance and advice on the industry best practice in regards to safeguarding
Skills Used:
We built on our:
  • Ability to assess the firm’s existing arrangements on safeguarding and map these arrangements to the regulatory “golden standards”
  • Proven knowledge and understanding of the payments industry, of the emoney and payment services safeguarding regulations and our awareness of market standards
  • Skills, capabilities and experience of our team

 


Safeguarding Internal Audit, Remittance Firm / Agent Model


The Challenge
Our client, required specialist internal audit services to assist with a review of licensing conditions in the UK and Belgium. The client’s business model utilises high street agents to accept cash for onward payment around the world.

 

Protiviti Solution

Value Delivered

Approach
Our approach entailed:
  • Review of policy, procedure, control logs
  • Review of key safeguarding processes:

-Cash at bank reconciliations

- Internal reconciliation of safeguarding requirement versus safeguarding funds and subsequent movement of funds

- Review of safeguarding acknowledgement letters

- Review of due diligence arrangements over safeguarding account providers

- Review of excess funds in safeguarding accounts

- Review of client agreements

- Review of agent agreements

  • Development of a risk and control matrix
  • Design and execution of tests
  • Reporting writing
Deliverables:
  • Risk and control matrix
  • Audit tests
  • Work papers detailing performance of tests
  • Audit report
Benefits:
  • Provided challenge to management ahead of external audit of Safeguarding arrangements
  • Completion of audit plan
Skills Used:
We built on our:
  • Proven knowledge and understanding of the payments industry, safeguarding regulations
  • Internal audit and skills and risk and compliance skills of the team