18 Jul Navigating CPS 230: The New Era of Operational Resilience in Financial Services
From 1 July 2025, Australian financial institutions will be required to comply with an updated regulatory standard CPS 230 that reshapes how operational risk should be managed across the sector. CPS 230 is a comprehensive framework for operational risk management and replaces previous standards concerning outsourcing (CPS 231) and business continuity (CPS 232). It complements the existing CPS 234 standard on information security. While this may appear to be a structural revision, the requirements contained within CPS 230 represent a significant transformation in how institutions must govern and sustain operational resilience.
This development occurs within a broader context in which operational disruptions have become increasingly frequent. Cyberattacks, technological failures, and third-party outages no longer represent peripheral concerns but are central to the stability of financial services. CPS 230 responds to this environment by compelling institutions to define their critical operations, establish explicit tolerance levels for disruption, and demonstrate an ability to continue operating under adverse conditions. Regulatory compliance now demands tangible and auditable evidence of preparedness and action, rather than the mere existence of contingency documentation.
Strengthening Governance & Accountability
A central feature of CPS 230 is the expanded role of institutional governance in operational risk management. Boards must now play a direct role in setting tolerance thresholds, approving risk appetites, and overseeing the institution’s response to disruptions. This shift imposes greater accountability on Directors, who must now ensure that resilience is considered a strategic imperative rather than a delegated technical task. Senior management, in turn, must ensure that operational risk is embedded across all layers of the institution’s structure, including frontline operations, service delivery, and technology.
The regulation also introduces more stringent requirements concerning the management of third-party and intercompany service arrangements. Institutions must identify and register all material service providers and ensure these relationships are governed by appropriate contracts. These contracts must include clauses addressing service continuity, data ownership, and audit rights. While APRA has provided a transition period for the updating of legacy contracts, institutions remain fully responsible for the risks posed by their service providers, regardless of contractual progress.
Data as the Backbone of Resilience
A further defining element of CPS 230 is its emphasis on data. Institutions are required to use timely, accurate, and comprehensive data to monitor operational performance, detect emerging risks, and support critical decision-making processes. The regulation specifies that institutions must be capable of escalating and reporting material service disruptions within 72 hours and breaches of critical operations within 24 hours. These timelines reflect a broader regulatory expectation that institutions will possess the systems and internal controls necessary to respond rapidly to operational threats.
In this context, the quality and governance of data systems become a foundation for regulatory compliance. Institutions must be able to trace the origins of operational data, automate reporting processes where appropriate, and integrate their risk systems to form a coherent view of operational health. These requirements place new demands on infrastructure, culture, and executive oversight.
InfoCentric has been working with Financial Institutions to implement data governance solutions which support the CPS 230 standard by providing rich meta data capabilities. A well implemented data governance platform enables Financial Institutions to bridge the gap between business and technology, typically providing a business glossary, data lineage and data catalogue for critical data elements.
Preparing for Implementation & the Path Forward
In anticipation of implementation, institutions should assess the maturity of their operational resilience programs. This includes conducting scenario analysis to test business continuity measures, reviewing the adequacy of third-party management frameworks, and identifying gaps in reporting capability. Boards and senior executives should familiarise themselves with their responsibilities under CPS 230 and ensure that those responsibilities are supported by robust internal processes.
CPS 230 establishes a new benchmark for operational risk management. The standard reflects APRA’s broader shift toward proactive supervision and measurable resilience. Institutions that respond by building coherent, data-informed frameworks will be positioned to maintain continuity during disruption, meet evolving expectations, and preserve confidence in their capacity to operate safely within a complex and dynamic environment.