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Meeting expanded expectations

APRA’s strategic objectives for the period 2019-2023 were detailed in its updated Corporate Plan, which was released in August 2019. The plan identified four strategic focus areas to strengthen outcomes for the Australian community:

  • maintaining financial system resilience;
  • improving outcomes for superannuation members;
  • transforming governance, culture, remuneration and accountability (GCRA) in regulated financial institutions; and
  • improving cyber-resilience across the financial system.

These areas reflected an expansion of expectations by Government and the broader community of APRA’s role, particularly with respect to a greater focus on non-financial risk and the behaviour of those in leadership positions within the financial services industry, as well as the emergence of newer and increasing risks such as those related to cyber resilience. Increased emphasis on information-sharing and collaboration with peer agencies, particularly the Australian Securities and Investments Commission (ASIC), was also prioritised.

During the year, APRA put considerable effort into increasing the publicly available information about its activities and the industries it regulates. Most notably, APRA published the first superannuation heatmap in December 2019 (with a subsequent update in June 2020), providing assessments of every MySuper superannuation product in three key areas: investment performance, fees and costs, and sustainability. APRA also published its first ‘Year in Review’, providing additional information on APRA’s activities and achievements, as well as key statistics on the regulated industries.

Internally, a new supervisory risk assessment model was developed, designed to align with these newer areas of activity and drive APRA’s supervisory resource allocation. APRA also continued to make significant investments in its capabilities with respect to crisis management, data collection and analysis, and leadership.

Notwithstanding the disruption caused by COVID-19, APRA remains committed to all these initiatives. Many are necessary to respond to various recommendations from the Royal Commission, the APRA Capability Review and other reviews and inquiries. But more crucially, they will ensure APRA remains a strong and effective prudential supervisor into the future, and well placed to continue to perform its role protecting the financial wellbeing of the Australian community.