In the UK (CASS) and other jurisdictions, safeguarding client funds is not just best practice; it is a rigid regulatory regime. Firms must perform an internal client money reconciliation daily to verify that the funds held in segregated bank accounts match the total liability to clients. Doing this manually in Excel is a liability; automation is required to meet the audit standards.
The Internal vs. External Reconciliation
CASS requires two distinct checks:
Internal Reconciliation: Comparing the internal "Client Money Requirement" (what you should have based on user liabilities) against the internal "Client Money Resource" (what you think you have in the bank).
External Reconciliation: Comparing the internal "Client Money Resource" against the actual Bank Statement.
The automation pipeline must ingest the bank file, query the ledger, run the diff, and generate a timestamped report by T+1 morning.
The Prudent Segregation Record
Regulators require a "Retrievable Archive."
The Snapshot: The system must create an immutable snapshot of every user's balance at the COB (Close of Business).
Shortfall/Excess Management: If a discrepancy is found (e.g., a shortfall of £100), the firm must transfer its own corporate funds into the Client Money account immediately to cover the gap. Automation triggers these "Top-Up" transfers to ensure continuous protection.
