An Overview of APRA CPS 230
Over the recent years, operational risk has been a central issue for the superannuation, insurance and banking industries as they faced the COVID-19 pandemic, volatile market conditions and the emergence of new and heightened risks. With the objective to strengthen the management of operational risk in these industries and minimise the impact of disruptions to customers and the financial system, APRA released a new cross-industry Prudential Standard CPS 230 Operational Risk Management (CPS 230) in July 2023.
CPS 230 sets forth minimum standards and regulatory requirements that APRA-regulated entities must adhere to in order to mitigate and manage operational risks effectively and ensure the uninterrupted continuity of their business operations within acceptable parameters. It also encompasses guidelines for overseeing third and fourth-party risks, outlines procedures for ending pre-existing contractual agreements, and mandates the reporting of material operational risks to APRA.
The CPS 230 will replace five existing standards: Prudential Standard CPS 231 Outsourcing, Prudential Standard CPS 232 Business Continuity Management and the equivalent superannuation and health insurance standards (SPS and HPS).
The final version of CPS 230 is available to read here.