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The Australian Prudential Regulation Authority's (APRA) CPS 230 standard sets stringent requirements for operational risk management, business continuity, and service provider arrangements. Meeting these requirements will be essential for regulated entities, but exceeding them can provide you with a significant competitive advantage.

In this blog, you can find out more about Protecht ERM’s approach to risk management aligns with the CPS 230 requirements in the following key areas:

  • Comprehensive operational risk management
  • Clear roles and responsibilities
  • Robust risk management framework
  • Effective business continuity planning
  • Management of service provider arrangements

Dive into CPS 230 with Protecht’s combined guide to CPS 230 compliance and blueprint for enhancing operational risk management:

Read the white paper

Comprehensive operational risk management

Operational risk management is at the heart of the CPS 230 standard, requiring organisations to have robust systems in place to identify, assess, and mitigate risks. Protecht ERM’s comprehensive approach to operational risk management covers all these bases, from risk assessments and policy consolidation to continuous monitoring and incident management.

  • Risk assessments: Protecht ERM streamlines the risk assessment process, making it easier for organisations to identify potential risks across all areas of their operations.
  • Controls management and assurance: Protecht ERM allows you to document, assess and monitor your controls. The platform’s user-friendly interface links your controls management and assurance processes directly to your risk assessments.
  • Policy consolidation: Protecht ERM consolidates all policies, obligations, and risk management practices into a single, integrated system. This ensures that there is a consistent approach to managing risks across the organisation, reducing the potential for gaps or overlaps in risk management strategies. All stakeholders remain informed and aligned with the organisation’s risk management framework.
  • Risk profile monitoring: Continuous monitoring of an organisation’s risk profile is crucial for maintaining an up-to-date understanding of the risk landscape. Protecht ERM provides real-time insights and analytics that allow organisations to monitor their risk profile continuously.
  • Incident management: Effective incident management is essential for minimising the impact of operational disruptions. Protecht ERM offers robust tools for incident identification, escalation, recording, and resolution. The platform’s integrated approach means that incidents are not only logged but also analysed to identify root causes and prevent recurrence.

Clear roles and responsibilities

Clear roles and responsibilities are fundamental to CPS 230. Protecht ERM provides the structure and tools needed to ensure everyone in the organisation knows their role in managing risk. This structured approach helps organisations meet CPS 230 requirements while fostering a proactive and responsible risk management culture.

  • User assignments: Protecht ERM makes it simple to delineate roles and responsibilities. Users can be assigned specific roles such as owners, reviewers, or action-takers within the system. The system's ability to assign and track tasks means that nothing falls through the cracks, and accountability is maintained at every level.
  • Automated notifications: Keeping track of risk management tasks and deadlines can be challenging, but Protecht ERM’s automated notifications ensure that nothing is missed. These notifications remind users of their responsibilities, upcoming and overdue deadlines, and any required follow-ups.
  • Analytics and dashboards: Protecht ERM’s analytics and dashboards provide a comprehensive overview of the organisation’s risk landscape. These tools offer actionable insights that help decision-makers at all levels make informed choices quickly. These analytics also provide transparency, helping to build a culture of accountability and continuous improvement.
  • Hierarchical drill down: Organisations are often complex, with multiple layers of management and operations. Protecht ERM’s hierarchical drill-down feature allows users to tailor risk management practices to the specific needs of each layer. Whether at the executive level or within individual business units, the system provides the flexibility to address risks appropriately at every level.

Robust risk management framework

A robust risk management framework is essential for meeting the stringent requirements of CPS 230. Protecht ERM’s robust risk management framework covers all critical aspects of governance, consistency, and strategic alignment, providing a comprehensive system that ensures all aspects of risk management are integrated, effective, and aligned with organisational goals.

  • Governance: Protecht ERM supports governance by providing clear structures and processes for oversight. This includes governance arrangements that ensure operational risk management is properly supervised. Protecht ERM enables organisations to maintain detailed records and reporting mechanisms that keep boards and senior management informed and accountable.
  • Consistent taxonomies: Protecht ERM employs consistent taxonomies and categorisation methods, which allow for the aggregation and comparison of information across different parts of the organisation. This uniform approach helps in creating a common language for risk management, making it easier to identify, assess, and mitigate risks.
  • Strategic harmony: Aligning risk management strategies with the overall objectives of the organisation is vital for coherence and efficiency. Protecht ERM ensures that risk management efforts are in harmony with the organisation’s risk appetite and strategic goals.

Effective business continuity planning

Business continuity planning is crucial for maintaining operations during disruptions and ensuring compliance with CPS 230. By focusing on critical operations management, evaluating disruption scenarios, supporting detailed continuity planning, and mapping out essential resources, Protecht ERM ensures organisations are prepared to handle crises and maintain operations.

  • Critical operations management: Identifying and managing critical operations is the first step in effective business continuity planning. Protecht ERM helps organisations pinpoint which operations are vital to their functioning and assess their tolerance for disruption, ensuring they have plans in place to maintain these essential functions during a crisis.
  • Disruption scenarios: Planning for potential disruptions requires understanding various scenarios that could impact operations. Protecht ERM enables organisations to evaluate and plan for a range of disruption scenarios. This includes assessing the impact of different types of disruptions, from natural disasters to cyber-attacks, and linking these scenarios to the processes and resources they affect.
  • Continuity planning: Protecht ERM supports the creation and maintenance of detailed business continuity plans. These plans outline the steps an organisation needs to take to maintain critical operations during a disruption. Protecht ERM's tools allow organisations to manage business impact analyses, develop recovery strategies, and test their continuity plans regularly.
  • Resource mapping: Understanding the resources needed to support critical operations is essential for continuity planning. Protecht ERM helps organisations map out the people, technology, facilities, and information necessary to keep their critical operations running.

Management of material service provider arrangements

Managing material service provider arrangements is a critical component of meeting CPS 230 requirements. Protecht ERM offers robust tools to ensure that third-party risks are identified, assessed, and managed effectively, helping organisations maintain control over their operations and compliance obligations. Customers can tier their third parties in Protecht ERM so that their effort is focused on material service providers.

  • Vendor risk management: Identifying and managing risks associated with third-party service providers is essential. Protecht ERM’s approach to managing service provider arrangements covers all essential aspects, from risk assessment and due diligence to contract management and impact analysis. It makes reporting on material service providers simple.
  • Due diligence streamlining: Conducting due diligence on service providers can be time-consuming and complex. Protecht ERM streamlines this process with built-in tools for assessing and documenting the capabilities and risks of each provider.
  • Contract consolidation: Managing contract information effectively is crucial for maintaining control over service provider relationships. Protecht ERM consolidates all contract information into a single, accessible system.
  • Impact analysis: Understanding how service providers impact critical operations is vital for effective risk management. Protecht ERM allows organisations to map out where and how service providers contribute to their critical operations. This impact analysis helps identify vulnerabilities and dependencies, ensuring that any potential risks are managed proactively.

Conclusions and next steps for your organisation

Achieving and going beyond CPS 230 compliance requires a comprehensive and integrated approach to risk management. Protecht ERM provides extensive tools and features to help your organisation meet and exceed these regulatory requirements:

  • Protecht ERM simplifies risk assessments, controls assessment and assurance, consolidates policies, and provides real-time monitoring and incident management to ensure organisations stay ahead of operational risks.
  • With features like user assignments, automated notifications, and detailed analytics, Protecht ERM ensures clarity and accountability across the organisation, fostering a proactive risk management culture.
  • Protecht ERM supports effective governance, consistent risk categorisation, and strategic alignment, ensuring that risk management efforts are cohesive and aligned with organisational goals.
  • The platform helps identify critical operations, evaluate disruption scenarios, and develop and test comprehensive continuity plans, ensuring organisations can maintain operations during crises.
  • Protecht ERM streamlines third-party risk management, due diligence, contract consolidation, and impact analysis, ensuring that organisations can effectively manage their service provider relationships and mitigate associated risks.

Find out more about how Protecht ERM can support your transition to CPS 230 compliance. Schedule a product demo or an introductory phone call today to see how our comprehensive risk management solution can enhance your organisation’s resilience and operational effectiveness:

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About the author

Damien Stevens leads our Product & Marketing team and is responsible for Protecht’s global product vision, design and go to market strategy. He graduated from the University of Technology, Sydney with a degree in Marketing & Finance. With extensive experience in B2B software, financial services and data and analytics, Damien has built and launched many widely used and loved products that solve real problems for large and small businesses.