Impact of CPS 230 on Australian Financial Institutions

This white paper examines the implications of CPS 230, a new standard from the Australian Prudential Regulation Authority (APRA), on banks and insurance companies in Australia. It outlines the regulation's focus on enhancing risk management practices, particularly concerning operational and third-party risks, and emphasizes the importance of business continuity planning. The paper identifies the challenges and opportunities that compliance with CPS 230 presents, effective from July 1, 2025. It discusses the heightened accountability for senior management and the need for comprehensive risk management frameworks. The document details key actions organizations should take to comply, including improving oversight of third-party providers and fostering a risk-aware culture. Additionally, it highlights the potential risks of non-compliance, such as regulatory penalties and reputational damage. The paper concludes by stressing the necessity for ongoing compliance efforts and the involvement of key leadership roles to ensure adherence to the new standards.