The Australian Prudential Regulation Authority (APRA) developed the CPS 234 standard to strengthen the resilience of the financial sector against cybersecurity threats. Officially titled APRA Prudential Standard CPS 234 Information Security, this standard requires financial institutions to implement a set of robust information security measures, focusing particularly on the protection of sensitive data and resilience against cyberattacks. It applies to all APRA-regulated entities, including banks, insurers, superannuation funds, and their related service providers, which are critical components of Australia’s financial infrastructure.
At its core, CPS 234 mandates a risk-based approach to information security management, requiring organisations to understand their unique threat landscape and adopt security controls that adequately mitigate identified risks. Key areas covered include board responsibility, incident response, and oversight of third-party providers. For example, the standard places accountability on the board of directors and senior management, who must ensure that information security capabilities remain sufficient in light of evolving cyber threats. APRA expects organisations to periodically review and assess their information security posture and the effectiveness of their risk mitigation strategies.
A significant focus of CPS 234 is on third-party and supply chain security. The standard requires organisations to maintain security controls over all data accessible to third-party service providers. To meet this requirement, entities must ensure that service providers implement appropriate security measures and comply with CPS 234 standards. This accountability extends to the oversight and regular evaluation of third-party risk, including a requirement to notify APRA of any material cybersecurity incidents within 72 hours. Such transparency is designed to minimise the impact of breaches and foster a proactive approach to threat management.
Ultimately, APRA CPS 234 seeks to create a culture of continuous improvement and proactive risk management in the financial sector. By establishing strict requirements for data protection, incident management, and board-level oversight, APRA aims to improve not only the cybersecurity resilience of individual organisations but also the stability and security of Australia’s broader financial ecosystem. Compliance with CPS 234 thus ensures that organisations can effectively manage cyber risks while maintaining trust with customers and stakeholders in a rapidly evolving threat environment.
