Australia’s prudential regulator has set its sights on banking-as-a-service (BaaS) arrangements as part of proposed new rules aimed at strengthening operational risk management in financial services.
The Australian Prudential Regulation Authority on Thursday began consulting on a new draft prudential standard, CPS 230, that would also require banks, insurers and super funds to identify “core technology” service providers.
CPS 230 brings together related operational risk concepts from five existing prudential standards into a single standard, with updated requirements for business continuity and service provider management.
It “introduces a principles-based approach to operational risk management that is outcomes-focused”, targeting “key areas where weaknesses have been observed by APRA”, as well as international best practice.
APRA chair Wayne Byres said the updated rules sought to “enhance operational and financial resilience, as well as financial stability” at a time of “changing business models, lessons from recent years and developments in global good practice”.
“The proposed CPS 230 will also help ensure APRA-regulated entities…
