APRA sets 2025 start for new risk standards

The Practice Guide CPG 230 aims to support the management of financial institutions.

The Australian Prudential Regulation Authority (APRA) has settled its prudential practice guide to aid banks, insurers, and superannuation trustees in reinforcing the management of operational risk and enhancing business continuity planning.

The Practice Guide CPG 230 supports the implementation of Prudential Standard CPS 230, which was finalised in July last year and will take effect on 1 July 2025.

In a new response to submissions, APRA reaffirmed its emphasis on the resilience of critical operations and third-party risk management, while also announcing several key changes to the guidance:

• The guidance has been shortened and focused more closely on meeting the expectations set by the standard.
• Non-Significant Financial Institutions have an additional 12 months to comply with certain CPS 230 requirements related to business continuity and scenario analysis.
• APRA has included a "day one" checklist to assist entities in implementing CPS 230.
• A three-year forward plan for supervising CPS 230 has been provided to help the industry with implementation and planning.

“Disruptions to financial services can have a major impact on people who rely on them to save, spend, recover from financial loss or support themselves in retirement. CPS 230 is designed to ensure entities safeguard the resilience of their operations and are well prepared to respond to disruptions. By amending the accompanying guidance, we aim to keep industry standards high while also being mindful of the compliance burden on smaller entities so they can remain competitive.” said APRA Chair John Lonsdale in a media release.