Do you have too many safeguarding accounts to reconcile?

Ross McGee
Ross McGee

Not placing your eggs all in one basket is an adage as old as time. It is particularly popular within financial circles no matter whether it is in relation to investing or safeguarding. However, one pitfall to this approach is that when there are more baskets, it becomes harder to check each of them.  

This is a crucial consideration for EMIs given that although regulators encourage them to diversify the number of safeguarding accounts they use, they also enforce that EMIs check client funds. Moreover, it is further complicated by the fact that reconciliation is the default way to confirm the total of client funds. Whilst this ensures accuracy, if done manually, it is incredibly labour-intensive and time-consuming – something which does not align well with the fact that the FCA demands that EMIs conduct both internal and external reconciliations every day.

There therefore appears to be a fine line between getting reconciliation done in time across multiple accounts and having enough safeguarding accounts in operation to meet diversification recommendations. Yet is this the case? Read on to discover how, with Aurum, the best of both worlds is attainable.  

Challenges with multiple safeguarding accounts for EMIs

Diversifying safeguarding accounts is great for clients as it reduces the risk level of their funds, but it can in contrast cause issues for finance teams of EMIs. If you currently manually reconcile your safeguarding accounts, this is highly likely, with the following consequences bound to occur:  

  • Lost time - manually tracking transactions across numerous accounts can be extremely time-consuming, diverting resources away from more strategic tasks.
  • Error-prone processes - the more accounts there are to reconcile, the higher the likelihood of errors. Manual data entry and analysis significantly increase the risk of discrepancies.
  • Limited visibility - managing multiple accounts often results in limited visibility into the overall safeguarding position, making it difficult to assess an institution's protection of client funds - a problem for both EMIs themselves and auditors.

Aurum Solutions: a single source of truth

Fortunately, Aurum Solutions offers a comprehensive response to the challenges posed by diversified safeguarding accounts:

  • Automated reconciliation - automating the reconciliation process significantly saves time and removes the potential for errors to occur. Aurum therefore ensures that all transactions across diversified accounts are accurately matched and reconciled without any hassle.
  • Scalable solutions - designed to handle multi-account and multi-currency scenarios, Aurum's platform scales efficiently as EMIs expand their safeguarding strategies. This scalability ensures that EMIs can continue to diversify their accounts without creating any reconciliation burden.
  • Centralised reconciliation process - as an automated reconciliation platform, Aurum not only reconciles transactions from all accounts, but it also provides a central hub for exception management, visualisation and analysis to take place, nullifying the problem of intel being in various sources.
  • Enhanced visibility - by consolidating data from multiple accounts into a single dashboard, Aurum provides EMIs with comprehensive visibility of their safeguarded funds. This enhanced visibility supports better decision-making and risk management, and also appeases auditors.

Don’t hesitate - automate

Ultimately, responsibility for protecting client funds lies with an EMI; however, they are wise to heed FCA recommendations to safeguard with the assistance of a variety of accounts. Large numbers though, no matter what they are in relation to, often lead to confusion. That's why it pays to bring the reconciliation of all safeguarding accounts under one roof to achieve a single source of truth with Aurum.

Streamline and reduce risk with complete transparency over infinite numbers of safeguarding accounts by booking your Aurum demo today.

Get started. Together with Aurum.
It’s time to automate your reconciliation.
Request Demo
Related resources