APRA has recently announced its priorities for 2019. Please see below excerpts that are relevant to the operational risk management and the business continuity practitioners. See here for the full report.
“Operational risk and related standards
APRA has commenced an important project to update its existing prudential standards and guidance on outsourcing, business continuity and information security, which apply to entities in the banking, insurance and superannuation industries. The objective of this initiative is to align prudential requirements with industry better practice and community expectations for a high degree of resilience to material operational risk incidents.
In conjunction with these more technical standards, APRA’s intention is to issue broad-based expectations for operational risk management and resilience that align to the overarching risk management framework. APRA will take the opportunity to streamline existing requirements where appropriate.
The first stage of this project, involving a new prudential standard on information security was finalised in late 2018, with the new standard to commence on 1 July 2019. APRA will consult on associated guidance on information security in the first half of 2019. Subsequently, requirements for operational risk management and revised standards for business continuity and outsourcing (updated to cover service provision more broadly) will be the focus of consultation over the course of 2019.”
Our reading of the tea leaves is that there could well be considerable changes to the way APRA regulates the Australian finance market in the near term. The outcome of the Hayne Royal Commission and the looming risks from climate change means that it is likely that over the next twelve months our business continuity plans may need to be thoroughly reviewed.