APRA’s 2026–27 Corporate Plan: sharper execution, with FAR and governance reforms in view

The Australian Prudential Regulation Authority’s (APRA) 2026–27 Corporate Plan (the 2026–27 Plan), published on 19 August 2026, sets three strategic objectives for the next four years: maintaining financial safety and stability, ‘getting the balance right’ by reducing administrative burden and improving APRA’s organisational effectiveness. Under these objectives, the 2026–27 Plan outlines APRA’s policy, supervision and data initiatives planned for the next 12 to 24 months.

The 2026–27 Plan is not a deregulation program. It explains how APRA intends to maintain resilience while reducing unnecessary burden and improving delivery. APRA notes that its aim is for the simplification measures to offset the impact of new requirements introduced, resulting in a broadly net-neutral impact on regulatory burden.

In summary:

• Three strategic objectives: the 2026–27 Plan is built around three strategic objectives; the first two objectives focus on maintaining financial safety and stability while minimising unnecessary regulatory burden, while the third objective continues APRA’s focus on improving its own organisational effectiveness.
• FAR and governance reform proposals illustrate ‘getting the balance right’: separate June 2026 proposals to update the Financial Accountability Regime (FAR) and Prudential Standard CPS 510 Governance (CPS 510) would reduce duplicative administration while strengthening substantive accountability and board expectations. They remain subject to consultation and are expected to come into effect from early 2028.
• Readiness is a supervisory priority: APRA highlights geopolitical shocks, AI-enabled cyber threats, quantum computing, common technology platforms and material service providers as risk sources that APRA expects entities to prudentially manage.
• CPS 230 remains a supervisory focus: entities should be ready to demonstrate operational resilience, critical-operations planning and service-provider oversight in compliance with Prudential Standard CPS 230 Operational Risk Management (CPS 230); in 2026–27, entities should expect more frequent and deeper engagement from APRA on cyber and AI risks.
• Superannuation governance in focus: APRA will require selected large superannuation trustees to appoint an independent party to review their valuation governance practices, with a focus on unlisted assets, and will hold trustees to account for timely remediation of any material gaps.

APRA’s 2026–27 Corporate Plan: the shift in focus

The below table sets out how APRA’s strategic objectives as expressed in its previous corporate plans have evolved over time.

The 2026–27 Plan provides that APRA will prioritise the following five prudential outcomes in 2026–27 to ensure that regulated entities remain resilient in an environment of rising risks:

• strengthen operational resilience in response to AI and cyber risks
• strengthen resilience to geopolitical risks
• ensure the system is prepared for severe stress
• improve outcomes for superannuation members
• prepare for a new payment’s role.

FAR: less form, not less accountability

On 16 June 2026, APRA and the Australian Securities and Investments Commission (ASIC) announced proposed changes to streamline FAR and reduce administrative burden without lowering accountability standards. The proposed changes are summarised below:

• APRA and ASIC propose removing prescribed key functions from the FAR regulator rules. This would reduce rules-based mapping and notification work but would not remove the underlying obligation to allocate accountability.
• APRA and ASIC propose raising the materiality threshold for notifying changes to accountability arrangements. Routine organisational changes should be less likely to require notification, but material changes would remain reportable.
• APRA and ASIC propose removing direct-report information from accountability maps. They expect this to reduce the frequency of map updates without removing the map itself.
• ASIC also plans to streamline responsible-manager requirements for FAR entities from October 2026 by reducing requirements to submit evidence of competence. Separately, APRA proposes removing routine fit-and-proper reporting as part of draft CPS 510.

The 2026–27 Plan provides that APRA and ASIC intend to jointly consult on the proposed changes in the first half of 2026–27, with commencement expected in early 2028. Until then, existing FAR obligations continue. For further detail, see the 19 June 2026 article, APRA and ASIC announce welcome reforms to the Financial Accountability Regime.

Governance reform: stronger substance, less duplication

On 16 June 2026, APRA released a consultation paper, a draft standard CPS 510 and related amendments to Prudential Standard CPS 001 Defined Terms. Draft standard CPS 510 would consolidate five existing prudential standards into a single, cross-industry standard applying consistent governance minimums to all APRA-regulated industries. The proposed new requirements in draft standard CPS 510 aim to reinforce expectations of boards and senior leaders while reducing duplication and providing greater flexibility.

The 2026–27 Plan provides that APRA plans to finalise the new cross-industry governance requirements in the first half of 2026–27, with commencement expected in early 2028. For further detail, see the 19 June 2026 article, APRA’s governance overhaul: implications for regulated entity boards.

The 2026–27 Plan expressly identifies the proposed FAR and governance reforms as planned policy priorities. Those reforms were announced separately to the 2026–27 Plan, but they illustrate how APRA will balance maintaining financial safety and stability with minimising unnecessary regulatory burden: less duplication and greater flexibility on one side and strengthened accountability and governance requirements on the other.

Strengthening resilience to geopolitical risks

APRA now identifies geopolitical risk as a key area of concern. In 2026–27, APRA will subject entities to more intensive supervision in relation to the management of geopolitical risks and require certain larger entities to conduct targeted readiness assessments against APRA’s minimum expectations.

CPS 230: operational resilience in response to AI and cyber risks

In 2026–27, there will be more frequent and deeper engagement from APRA on cyber and AI risks in its supervisory interactions. While the commencement of CPS 230 has strengthened operational risk management, APRA expects entities to continuously strengthen their governance, risk management, operational resilience and board oversight to keep pace with new and evolving risks.

For further detail on APRA’s approach to AI governance and quantum readiness, see [insert hyperlink].

Preparing for severe stress

APRA will increase its focus on contingency planning to ensure that the financial system is prepared for a severe downturn or disruption.

• Entity resilience: APRA will review banks’ lending standards (small and medium-sized business lending in the first half of 2026–27, then housing lending) and liquidity risk management and will run a joint stress test with the Reserve Bank of New Zealand. It will also increase its focus on business continuity planning, expecting entities to regularly test their plans against severe but plausible operational disruptions, including escalating cyber and frontier AI threats.
• System resilience: building on entity-level stress testing, APRA will launch a new system-wide stress test in 2026–27 to better understand the financial stability implications of growing interconnectedness between banks and superannuation trustees and will continue to monitor housing lending and macroprudential settings. APRA will work with the government on potential legislative reforms to ensure that the Financial Claims Scheme remains fit for purpose and unclaimed moneys from exits are dealt with more efficiently.

Banking: capital and liquidity standards

Over the course of 2026–27, APRA plans to make targeted updates to its capital and liquidity standards for banks.

• Capital: In the first half of 2026–27, APRA plans to finalise targeted changes to the bank capital framework, with the aim of reducing regulatory burden and freeing up lending capacity while maintaining strong capital standards. APRA plans for the new requirements to come into effect from 1 April 2027.
• Liquidity: In the first half of 2026–27, APRA will consult on proposed revisions to bank liquidity requirements, strengthening practices for larger banks while introducing a more risk-sensitive approach to minimum liquidity holdings for smaller banks.
• Market risk: In the second half of 2026–27, APRA intends to consult on a proposed simplified version of the Basel Committee’s Fundamental Review of the Trading Book standard.
• Licensing: In the first half of 2026–27, APRA intends to finalise reforms that will simplify the bank licensing process and halve processing times for new bank licence applications.
• Non-operating holding companies: During 2026–27, APRA will review existing authorisations that apply to banks with non-operating holding companies where these are deemed no longer fit for purpose.

Superannuation: improving outcomes for members

For superannuation, the 2026–27 Plan points to a consultation package on a risk-sensitive capital framework supporting the proposed member compensation scheme, requiring selected large superannuation trustees to appoint an independent party to review their valuation governance practices and continuing work to finalise the Retirement Reporting Framework.