Compliance | Corporate Travel Management
A leading provider of corporate travel management solutions commissioned Edmund’s services to conduct a thorough review of their past business practices concerning the safeguarding of customer funds. This audit was initiated in direct response to guidelines from the FCA and driven by an internal need to align with these regulatory standards.
Who is the client?
The problem
The main challenge involved conducting a detailed examination of the company's historical adherence to regulatory requirements for safeguarding customer funds. This was required due to potential gaps in compliance that could impact the financial integrity and trust of their business operations.
The backstory
The review was initiated following internal assessments and a need to ensure compliance with the FCA’s safeguarding requirements. This was driven by potential gaps in the company's practices related to the handling and safeguarding of customer funds, necessitating a thorough evaluation to meet regulatory standards.
The Edmund Group Solution
After an extensive assessment, our team identified several key compliance issues relating to safeguarding practices. Our remediation plan included the following recommendations:
Development and implementation of a formal safeguarding policy to establish clear procedures and controls around the handling of customer funds;
Improvement of existing documentation, including detailed descriptions of safeguarding methods, rationale for key decisions, evidence of board oversight and compliance with the Payment Services Regulations (PSRs);
Strengthening of oversight and control mechanisms to ensure continuous compliance and prevent future non-compliance with safeguarding requirements; and
Rectification of the safeguarding account setup, particularly around the appropriate designation and separation of funds.
The outcome
Recognition of significant non-compliance issues concerning the safeguarding of customer funds, particularly with the inadequate segregation of funds and improper use of insurance as a safeguarding measure;
Identification of major control weaknesses and potential regulatory breaches; and
Recommendations for substantial improvements in internal processes, including the establishment of appropriate safeguarding policies, enhanced documentation and stricter oversight mechanisms.
