On 4 September 2025, the Australian Prudential Regulation Authority (APRA) published a speech from its Executive Director of Cross-industry Risk, Chris Gower. The title of the speech is Finding balance at a time of rising risk.

In his speech, Mr Gower runs through APRA’s assessment of the current financial risk landscape and how its latest Corporate Plan balances keeping the Australian financial system safe and resilient but also efficient and competitive. Mr Gower also notes that internationally there continues to be significant geopolitical uncertainty and that geopolitical unrest has also correlated with an increase in cyber-attacks. Domestically, while the global outlook presents downside risks, growth in the Australian economy is expected to pick up slightly in the next year.

Mr Gower discusses APRA’s 2025-26 Corporate Plan which is built around the following four pillars:

  • maintaining financial and operational resilience; 
  • responding to significant and emerging risks;
  • getting the regulatory balance right; and
  • improving our organisational effectiveness.

In the context of maintaining financial and operational resilience, Mr Gower notes that:

  • APRA will this year finalise revisions to the bank capital framework to phase out Additional Tier 1 capital instruments over coming years and will also engage with industry on potential revisions to the bank liquidity framework;
  • in July this year, CPS 230, APRA’s first prudential standard focused on operational risk management, came into force. Over the next year, APRA will focus on assessing how effectively entities are meeting these new obligations; and
  • APRA will provide an interim update in the next few months following the release of eight proposals in March 2025 to strengthen governance across all APRA-regulated industries.

Another pillar of the 2025-26 Corporate Plan that Mr Gower discusses is responding to significant and emerging risks. This includes strengthening institutions’ cyber resilience and stepping up monitoring of AI practices across larger institutions, including the appropriateness of risk management and oversight.

Perhaps the most notable change to APRA’s Corporate Plan is the inclusion of the third strategic objective of getting the balance right. Mr Gower explains that whilst at one level this is business as usual for APRA, its elevation to a strategic objective reflects the scrutiny on the costs of regulation that, driven by stubbornly low productivity growth, has been an increasing focus in recent years. Like other Australian regulators, APRA received a letter from the Federal Treasurer asking it to identify specific, measurable actions to reduce regulatory compliance costs without compromising standards. Mr Gower runs through some of the actions that APRA has taken since receiving this letter including removing outdated or duplicative rules from our governance prudential standards.