In a speech to the RMA CRO Conference, the Australian Prudential Regulation Authority (APRA) set out how its latest Corporate Plan prioritises financial and operational resilience in a volatile risk environment while elevating “getting the balance right” as a strategic objective aimed at improving proportionality and reducing unnecessary compliance costs. The address flagged closer supervisory attention to emerging risks, including a planned review of artificial intelligence (AI) practices at some larger institutions, while maintaining that APRA’s existing prudential framework is sufficient to capture AI use and that no new AI-specific regulations are planned. Key initiatives highlighted include finalising revisions to the bank capital framework to phase out Additional Tier 1 instruments over coming years, engaging industry on potential revisions to the bank liquidity framework, and supervising implementation of CPS 230 following its commencement in July. On cyber resilience, the speech reiterated that progress under CPS 234 has been slower than expected and pointed to APRA’s June letter to superannuation funds on robust authentication controls following credential stuffing attacks, with responses now being assessed. APRA also noted a Council of Financial Regulators geopolitical risk workplan that will feed into routine supervision, and its first system stress test examining banking and superannuation linkages, with initial findings from the first phase expected this year. On regulatory burden, APRA referenced its response to the Federal Treasurer’s request for specific, measurable actions to reduce compliance costs, including simplifying bank licensing (aimed at halving processing time), clarifying supervisory expectations for capital requirements tied to specific risks, introducing a third proportionality tier for banks, reducing capital requirements for annuity products and promoting access to cost-effective reinsurance for general insurers, and removing outdated or duplicative governance rules. Further work is planned with industry to reduce data reporting burden, including addressing overlap between prudential reporting and statutory obligations under the Financial Accountability Regime through engagement with Treasury and the Australian Securities and Investment Commission.

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