The Australian Prudential Regulation Authority (APRA) has released its 2025–26 corporate plan, setting out its supervisory and policy agenda for the next four years. The regulator emphasised the twin goals of preserving financial stability while easing unnecessary regulatory burden, with Chair John Lonsdale stating: “A strong and stable financial system is an essential prerequisite for economic growth”.
The plan comes at a time of heightened global uncertainty, with APRA warning that geopolitical tensions, climate-related risks and technological disruption could create fresh challenges for the financial system. Domestically, lower interest rates and strong housing demand may test banks’ risk management standards. The regulator also acknowledged government pressure to reduce compliance costs and to support productivity, following a July 2025 letter from the Treasurer and Finance Minister urging regulators to set measurable actions.
APRA has identified four strategic objectives: maintaining financial and operational resilience, responding to significant and emerging risks, striking the right regulatory balance, and improving organisational effectiveness.
Key takeaways from the plan
Several supervisory and policy initiatives will dominate APRA’s agenda over the coming 12 to 18 months:
- Cyber resilience: Following a rise in attacks, APRA will monitor emerging risks linked to artificial intelligence and geopolitical conflict, while testing compliance with its new operational risk standard CPS 230.
- Governance and stress testing: The regulator will update prudential standards on governance and publish its inaugural System Stress Test, which will assess interlinkages between the banking and superannuation sectors.
- Superannuation oversight: APRA will increase scrutiny of fund expenditure and member outcomes, particularly at large platform providers, alongside a review of investment governance practices.
- Climate risk: The regulator plans to release the results of its climate vulnerability assessment for the general insurance sector.
- Balancing safety and competition: Initiatives include consulting on a third tier of proportionality in banking regulation, promoting affordable reinsurance options for insurers, and removing redundant requirements.
APRA’s industry data snapshots underscore the scale of its remit: A$6.6 trillion in banking assets, A$2.9 trillion in superannuation, and A$304bn across insurance.
Next steps for the regulator
Lonsdale stressed that the regulator will “step up our focus on identifying opportunities to better support competition and productivity without compromising on our safety and stability objectives”. APRA also committed to enhancing its own effectiveness by investing in supervisory capability, strengthening data and technology systems, and building future leadership capacity.
For boards, senior managers and compliance leaders, the plan signals continued scrutiny of operational risk management, governance and accountability, with an added emphasis on proportionality and efficiency. As APRA prepares to publish the outcomes of its stress tests and climate assessments, the regulator is positioning itself to respond quickly to both global shocks and domestic vulnerabilities.
CUBE Comment
Compliance leaders should act now by ensuring their cyber resilience frameworks meet APRA’s new CPS 230 requirements, with particular focus on AI-driven and geopolitical threats. Boards should strengthen governance arrangements, accountability lines, and data systems to prepare for upcoming stress testing and updated prudential standards. Superannuation trustees must improve oversight of expenditure and investment practices to demonstrate clear member outcomes. Finally, firms should proactively review their climate risk frameworks and stress test exposures, anticipating future regulatory focus and disclosures.
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