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APRA has undertaken to publish its key directive focus for the next twenty-four months in an incredibly insightful document that lists agendas and deadlines. It's certainly a refreshing approach and welcomed to see a banking regulator on the front foot with planning and disclosure, sharing what they will target in their regulatory toolkit.
APRA's Key Policy Priorities for 2022 - 2023 | LINK
KEY FOCAL POINTS
If highlighting means anything, bankers need to be ready to assess and update Remuneration and Incentive policy, Operational Risk processes, Risk Assessment methods across outsourcing activities along with an emphasis on Business Continuity Management and resolution planning.
In the insurance domain; Governance, Insurance Concentration Risk and Liability Valuation are likely to fall under tighter scrutiny.
There is also a strong theme around operational resilience and crisis management, which isn't surprising and very much in line with publications emanating out of the Global Regulator, The Bank for International Settlements.
INTERNAL UPDATES
Interestingly the Australia regulator is planning to embrace "digitalisation" to help support better regulation.
The pace of change in the industry means that there will be an ongoing need to keep the framework updated on a dynamic basis
"Regtech and Suptech" will be explored by developing "machine-readable" regulatory compliance systems.
We must admit, these statements are a tad nebulous and up for the imaginable — are banks going to be required to publish Risk Indicators to the regulator, is the regulator about to embrace AI models is uncertain at this point in time. Still, they intend to establish an advisory panel that comprises of experts and stakeholders to explore what can be achieved with this type of technology.