Navigating CPS230 Implementation: Streamlining Business Resilience Efforts

As the deadline for APRA Prudential Standard CPS230 implementation draws nearer, organisations are intensifying their focus on streamlining methodologies and ensuring compliance and alignment across the business. Having had the opportunity to assist multiple businesses on this journey, here are some key takeaways and trends that I am seeing across the landscape.

1.       Embrace Alignment

Achieving alignment across different departments and teams is paramount. When it comes to CPS230 and implementing the regulation change all work streams, existing processes, including existing regulation, and lines of effort should be aligned and utilised where possible. This alignment encourages collaboration and ensures a cohesive approach to risk mitigation efforts. Whether it's aligning terminology, processes, or goals, fostering alignment across the organisation and ensuring this is directed from the top down is key to success.

2.       Early Compliance Focus

With the clock ticking toward the July 1, 2025 start line, organisations must prioritise ensuring CPS230 compliance and that all requirements set by APRA are met. By initiating compliance efforts sooner rather than later, organisations can mitigate the risk of last-minute scrambles and ensure a smoother transition to the new regulatory landscape. Once this initial compliance is met, organisations can then look towards maturing and refining the program inline with governance cycles to achieve better practice.

3.       Combatting Compliance Fatigue

Many organisations are grappling with compliance fatigue due to the increasing burden of regulatory requirements. Simplifying methodologies can play a crucial role in managing this fatigue. By streamlining processes, reducing administrative burdens, and leveraging technology where possible, organisations can alleviate the strain on employees and enhance overall compliance effectiveness.

4.       Address Interpretation Challenges

Interpretation of definitions and methodologies poses a significant challenge in CPS230 implementation. It's imperative to address these challenges proactively by fostering clear communication and providing ongoing training and guidance. By ensuring consistency in interpretation and application, organisations can mitigate potential compliance risks and achieve better outcomes.

5.       Strive for Simplicity

The process of implementing CPS230 should not be overly complicated. It's essential to strike a balance and avoid overcomplicating methodology, as APRA expects an entity’s approach to operational risk to be proportionate to its size, business mix and complexity. By keeping methodologies simple and straightforward, organisations can ensure clarity and understanding. The APRA deadline of 1 July 2025 is the start date for the regulation change and where organisations should ensure they have full compliance, however from here the journey of innovation and maturing begins.

After all these points it’s important to note that the prudential practice guide is still currently in draft, with APRA looking for signs of proactive planning and will be involved in the implementation before the standard comes into effect. By adopting a strategic and streamlined approach, businesses can effectively navigate the CPS230 landscape and not only ensure compliance, but strengthen their resilience in the face of operational risks and business disruptions.