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APRA announces ‘lighter’ policy load for 2023

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APRA has announced “a lighter” policy load for 2023.

The Australian Prudential Regulation Authority (APRA) has released its policy and supervision priorities for 2023, outlining its key focus areas for the next 12–18 months.

Commenting on the regulator’s upcoming plans, chair John Lonsdale confirmed that after several years of regulatory reform, “2023 will bring a lighter APRA policy load”.

“This will help regulated entities focus on embedding prior major reforms such as capital reforms in banking and insurance, as well as responding to challenges in the operating environment in the period ahead,” Mr Lonsdale said.

Key policy priorities for 2023 include the completion of “key reforms” to strengthen the financial and operational resilience of APRA-regulated entities, and improve outcomes for superannuation members.

The regulator also intends to progress its plans to modernise the prudential architecture, and to review core standards, including governance and the regulation of conglomerate groups.

Regarding its key supervision priorities, topping APRA’s ladder is cyber security which it plans to elevate by implementing “detailed assessments” and “rigorous pursuit” of breaches.

Also featured on the regulator’s list are “embedding the capital reforms for banks and insurers”, “continuing to hold trustees to account to improve superannuation member outcomes”, and “ongoing work” to address challenges in the availability, affordability and sustainability of insurance.

“We will continue to lean into key supervision priority areas. Operational resilience, including cyber preparedness, continues to grow in importance as a supervisory priority, with the significant data breaches at Optus and Medibank late last year underscoring just why,” Mr Lonsdale said.

“We have important work to do on climate risk, governance, culture and recovery planning while the superannuation sector can expect no let-up in our efforts to expose and eradicate underperforming products or actions that are contrary to members’ best interests,” he concluded.