Global Risks, Local Action: APRA Prioritizes Resilience in Australia’s Banking System

In today’s global financial arena, resilience is paramount. Unexpected events have underscored the interconnected nature of risks, leading regulators across the globe to prioritize the strengthening of a robust banking system.

As supervisors and regulators reflect on the localized impact of global events in their jurisdictions alongside with the local observations, a common thread emerges in evolving supervisory strategic priorities: financial resilience, operational resilience, and climate-related risks.

This trend is exemplified in Australia, where APRA’s 2023-2024 corporate plan covering four years to 2026-2027 offers valuable insight into the regulator’s forward-view of strategic priorities.

In addition to APRA’s continued support in improving Superannuation member outcomes, the corporate plan highlights other key challenges:

1. System-wide Risks

With the interconnected nature of global financial systems; identifying and evaluation the impacts of emerging risks to mitigate heightened risks.

Over the plan horizon, APRA will

  • Develop cross-industry stress testing framework to ‘explore how shocks to the financial system might be mitigated or propagated by the interactions between the banking, insurance, and superannuation industries.’
  • Use macroprudential tools to mitigate risks to financial stability at a system-wide

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2. Operational Resilience

Prudential Standard CPS 230 Operational Risk Management (CPS 230) effective from 1 July 2025 will:

  • Heighten expectations on regulated entities to address identified control weaknesses;
  • Increase focus on business continuity and third-party risk management to ensure these risks are managed appropriately; and
  • Engage with industry to improve the way non-financial risk data is collected and used to assess the effectiveness of regulated entities’ operational risk management practices.  

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3. Climate Related Financial Risks

APRA has been progressively indicating their expectations on regulated entities to prepare and respond to financial risks associated with climate change.

Publishing the Prudential Practice Guide CPG 229 Climate Change Financial Risks, 26 November 2021; to the first climate-risk assessment in 2022 and a follow-up survey in April 2024.

As part of their corporate plan, APRA will:

  • Conduct a Climate Vulnerability Assessment to assess the impact of climate risk on access and affordability of general insurance.
  • Embed climate risk in our Supervision Risk and Intensity (SRI) model to require ongoing supervisory assessment of this issue; and
  • Use existing and new data collections for climate risk to prepare and develop insights on emerging issues and best practices. 

For more information and how Nixora Group can support your organization:


Su J Song

Su J Song

Specializing in financial regulation with special focus on data driven strategies for Climate Risk and ESG services with evolving regulations.


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