Navigating Overlapping APRA Regulations: CPS230, CPS234, FAR, and More

The Australian Prudential Regulation Authority (APRA) has introduced a series of standards to strengthen the resilience and governance of regulated entities. While CPS230, with its focus on operational risk management, garners much attention, it doesn’t operate in isolation. Other key standards like CPS234 (information security), CPS231 (outsourcing), CPS510 (governance), and FAR (Financial Accountability Regime) also play critical roles, creating overlapping requirements that demand a cohesive and strategic approach.

Why Overlapping Regulations Matter

APRA’s regulatory framework is designed to work as an interconnected system, ensuring robust governance, risk management, and accountability across all aspects of a business. However, these overlaps can create challenges for compliance teams, including duplication of efforts, fragmented reporting, and potential gaps in accountability. By understanding how these standards interact, organisations can build a unified compliance strategy that minimises inefficiencies and maximises resilience.

Integration Opportunities

1. Information Security: Aligning CPS230 and CPS234
   CPS234 mandates that entities implement strong information security frameworks to protect sensitive data, which aligns with CPS230’s focus on operational risk management.
   ‍Key Actions
   • Use CPS234’s principles to strengthen the data resilience components of your operational risk frameworks under CPS230.
   • Ensure that incident response plans address both operational disruptions (CPS230) and data breaches (CPS234) to avoid silos in crisis management.
   • Conduct joint risk assessments for IT systems to align information security and operational risk objectives.
2. Governance: Bridging CPS230 and CPS510
   Governance under CPS510 emphasizes board oversight and accountability, which overlaps with CPS230’s requirements for managing operational risks.
   Key Actions
   • Ensure the board has clear visibility into both operational and governance risks, with integrated reporting that aligns with CPS230 and CPS510.
   • Establish a governance framework that embeds operational risk management into strategic decision-making processes.
   • Provide regular training for directors to understand their evolving responsibilities under these overlapping regulations.
3. Third-Party Management: Integrating CPS230 and CPS231
   CPS231 outlines requirements for managing outsourcing risks, which directly ties into CPS230’s focus on third-party resilience.
   ‍Key Actions
   • Embed CPS231’s outsourcing principles into your supplier policies and contracts, ensuring alignment with CPS230’s broader operational risk requirements.
   • Develop a centralised vendor risk management framework to track and monitor third-party performance against both standards.
   • Align due diligence processes for third-party onboarding with CPS230 and CPS231 requirements.
4. Accountability: Connecting CPS230 and FAR
   FAR introduces accountability requirements for senior leaders, which complements CPS230’s emphasis on operational resilience.
   ‍Key Actions
   • Map FAR accountability statements to CPS230’s operational risk areas to ensure senior leaders have clear oversight.
   • Include operational risk and resilience as key components of accountability statements under FAR.
   • Ensure consistent documentation and communication between FAR accountability and CPS230’s compliance framework.

Takeaways for Risk Professionals

Navigating overlapping APRA regulations doesn’t have to be overwhelming. By taking a strategic approach, organisations can streamline compliance and enhance their resilience.

1. Harmonise Standards
   Develop a unified compliance roadmap that addresses all overlapping obligations. This reduces duplication and ensures consistency across regulatory frameworks.
2. Streamline Reporting
   Invest in tools and processes that consolidate reporting requirements for CPS230, CPS234, CPS510, and other APRA standards. An integrated dashboard can provide a single source of truth for board and management reporting.
3. Enhance Communication
   Break down regulatory silos by fostering collaboration across teams. Cross-functional training and integrated compliance committees can ensure alignment between governance, risk, and IT teams.

How Ethika Can Help

Navigating the complexities of overlapping APRA regulations requires expertise and a unified approach. Ethika specializes in simplifying regulatory compliance through tailored advisory and AI-powered tools.

We can help your organization:

• Map regulatory obligations to your specific operational and governance framework.
• Create an efficient compliance strategy that harmonises overlapping requirements.
• Develop streamlined reporting and monitoring processes to ensure ongoing compliance.

With Ethika’s support, your organisation can turn regulatory compliance into a competitive advantage, building resilience, trust, and long-term success.