Our latest insights

Authorised deposit-taking institutions (ADIs) and the broader banking sector have recently faced significant headwinds, as the sector navigates unprecedented change. How can you best navigate current challenges and leverage opportunities to find efficiencies as you step into the new financial year? Here, we outline eight key considerations you should address to ensure your business is set up for FY24.

Last week, APRA Deputy Chair John Lonsdale delivered a speech at the COBA CEO and Director Forum. Reflecting on the history of the mutual banking sector, Lonsdale highlighted APRA’s recent review of mutuals exiting the industry and their performance 12 months prior to their exit. It brought to the fore several issues that could lead to potential future mutual exits, such as poor performance on cost management, lending growth and profitability. APRA highlighted three core priorities to “support a strong, stable mutual sector”, being: • Cyber risk, including CPS 234 reviews • Risk culture • Contingency and continuity frameworks

APRA’s feedback focuses on ensuring recovery from high-impact cyber-attacks. Boards are encouraged to seek assurance on the entity’s likely ability to recover from a high-impact cyber-attack.

IFRS 17 Insurance Contracts was issued by the International Accounting Standards Board (Board) on 18 May 2017. The Board published some amendments to IFRS 17, including a deferral of the effective date of IFRS 17 by two years, with entities required to apply IFRS 17 for annual periods beginning on or after 1 January 2023.

On Tuesday 23 November 2021, APRA released commentary following the conclusion of its pilot initiatives – the tri-partite audit and technology resilience data collection.

On Thursday 11 November 2021, APRA announced its proposed new attachment to Prudential Standard APS 220 Credit Risk Management.

While auditing risk culture is still a relatively new concept for most organisations, it’s an area that is receiving increased focus.

The Banking Executive Accountability Regime (BEAR) set out in Part IIAA of the Banking Act 1959, was introduced in February 2018.

APRA has now begun issuing notices to regulated financial institutions advising them to start preparing for CPS 234 tripartite reviews.

Appropriate culture, governance systems and remuneration structures are critical to rebuilding trust in financial institutions and ensuring a resilient financial system. APRA, as the prudential regulator, plays a significant role in this through introducing new standards and its oversight regime.

On 25 March 2019, APRA proposed updating its prudential standard on credit risk with an update to APS 220 Credit Risk Management to capture the full credit life cycle.