APRA’s Evolving Approach To Transforming Risk Culture in Australia

The supervision of risk culture has been an elevated area of strategic focus for APRA (Australian Prudential Regulation Authority) in recent years and is a key part of APRA’s ‘transforming governance, risk culture, remuneration and accountability’ community outcome outlined in its Corporate Plan. 

As supervising risk culture requires different skill- sets and approaches compared to traditional areas of prudential regulatory focus, APRA has established a specialist Risk Culture team which has enabled APRA to enhance its focus on risk culture through a broad range of activities. These activities include: the development of a risk culture framework, the roll-out of a risk culture benchmarking survey, the completion of a number of deep dive reviews of entities, and the up-skilling of supervisors in how to assess an entity’s risk culture. The team has also harnessed a range of innovative tools such as natural language processing and developed a risk culture transformation toolkit to help embed risk culture change in the long-term.