Payment regulations continue to evolve rapidly, driven by concerns over fraud, anti-money laundering (AML), data security, and consumer protection. For internal audit functions, this creates a heightened focus on compliance readiness. Organizations that prepare thoroughly demonstrate not only regulatory alignment but also a culture of accountability.
Preparation begins with a regulatory compliance gap analysis. Organizations should review applicable regulations—such as PSD2 in Europe, NACHA rules in the U.S., or AML requirements globally—against their current payment policies. Internal audit teams will look for documented evidence of compliance or plans to address gaps.
Equally important is policy and procedure documentation. Auditors expect to see clear, accessible documents that translate regulations into actionable steps. For example, if regulations require customer due diligence, payment processes should show how verification checks are performed and recorded.
Training and awareness form another critical area. Regulators and auditors alike recognize that controls are only as strong as the people applying them. Organizations should provide payment staff with regular training, ensuring they understand both regulatory obligations and internal protocols. Evidence of such training should be retained for audit review.
Payment system configurations should also be tested for regulatory alignment. For instance, are transaction monitoring thresholds consistent with AML requirements? Are customer consent mechanisms in place for electronic debits? Performing such validations before an audit prevents unpleasant findings.
Organizations should prepare compliance evidence packs containing licenses, regulator correspondence, AML monitoring reports, and policy certifications. Having this information ready demonstrates professionalism and reduces the time auditors spend requesting documentation.
Finally, organizations must adopt a forward-looking compliance approach. Regulators expect continuous improvement, not one-time alignment. Preparing for internal audits should therefore include horizon scanning for upcoming regulatory changes and evidence of plans to adapt payment processes accordingly.
By aligning payment processes with regulatory expectations ahead of internal audits, organizations minimize compliance risks and foster stronger stakeholder trust. Effective preparation turns regulatory compliance from a burden into a competitive advantage.
