In a recent speech at FINSIA's "The Regulators" event, John Lonsdale, Chair of the Australian Prudential Regulation Authority (APRA), discussed the regulator's emphasis on operational resilience and how it is looking to data to supervise the industry more effectively.
Lonsdale outlined APRA's work to enhance operational resilience standards by promoting better governance, risk culture, remuneration, and accountability in regulated entities. This, he said, "includes our work to increase the focus of boards and senior managers on non-financial measures such as community outcomes, and sharpened accountability to prevent poor outcomes”.
Londsale also discussed the importance of addressing system-wide risks and implementing cross-industry stress testing to safeguard financial stability and highlighted the critical role of data in effective prudential supervision, emphasizing the need for accuracy at the individual, industry, and economy-wide levels.
APRA has been actively enhancing its data collection and analysis capabilities to support risk-based supervision, gain deeper insights, and increase transparency. Notably, APRA established a new Technology and Data division this year, signaling a commitment to improving data-related processes and capabilities within the organization.
"In a more complex, interconnected financial system where products, companies and services transcend traditional boundaries, clear, constructive and forward-looking engagement between regulators and industry is required," Lonsdale concluded. “So too are strong ties between the regulatory community... By working together appropriately, APRA, ASIC, the Reserve Bank of Australia, AUSTRAC and other agencies can better protect the community, balance the regulatory burden for entities and ensure there is still room for competition and innovation to flourish.”