The Australian Prudential Regulation Authority (APRA) recently released in its prudential practice guide on the management of data risk for all its regulated institutions.

APRA is the prudential regulator of the Australian financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry

The Prudential Practice Guide CPG 235 Managing Data Risk (CPG 235) is a cross-industry guide designed to assist authorised deposit-taking institutions, general insurance industry, life insurance industry and the superannuation industry in appropriately managing their data risk and is targeted at those areas where APRA has identified weaknesses through its supervisory activities.

According to APRA, the management of data risk is crucial for the said institutions because it can affect their ability to meet financial and other obligations to beneficiaries.

“The risks associated with the use of data, including data application, retention, storage and security, have become more significant with increasing automation and the criticality of data to decision-making,” the agency said.

With the release of the CPG 235, the agency hopes that the Boards and senior management of APRA’s regulated finance institutions can incorporate it in their overall resilience strategy.