CPS 230 Is Here: What It Means for Procurement Professionals in Australia

What Is CPS 230?

CPS 230 is APRA’s new Prudential Standard on Operational Risk Management, going into effect on 1 July 2025. It’s a major regulatory shift for all APRA-regulated entities—banks, insurers, and superannuation funds.

At its core, CPS 230 requires organisations to proactively manage operational risks, critical operations, and material service providers. It goes far beyond compliance—it’s about business continuity, customer protection, and systemic resilience.

Key Insight: Procurement and third-party management are no longer back-office functions. Under CPS 230, they are front and center in ensuring operational resilience.

Download Whitepaper: Supplier Risk Management Framework: A Comprehensive Approach to Mitigating Supplier Risks

Why This Matters to Procurement

Procurement teams are now critical players in compliance with CPS 230. Here’s what changes:

1. Material Service Providers Trigger Regulatory Scrutiny

Vendors that support critical operations—such as payments, data hosting, cybersecurity, or customer-facing systems—may now fall under regulatory purview.

Implication: You must know who supports what, and assess if their failure could disrupt customer outcomes.

Example: A Tier-1 bank discovered during internal mapping that its cybersecurity monitoring provider outsourced services to an unvetted offshore subcontractor—raising a red flag under CPS 230.

Download Research Report: Integrated Risk Management: A Playbook for Procurement

2. End-to-End Risk Tracking Is Now Mandatory

APRA expects active risk management, not just contract compliance. This includes deeper due diligence, performance monitoring, and contractual safeguards.

Implication: Static SLAs and annual assessments aren’t enough. You’ll need real-time risk visibility and dynamic risk scoring.

3. Exit Strategies and Resilience Planning Are Required

Organisations must demonstrate the ability to switch providers or continue operations if a critical vendor fails.

Implication: Contingency planning, dual sourcing, and operational redundancy must be baked into procurement strategy, not just considered in emergencies.

Procurement’s CPS 230 Action Plan

Here’s how you can get started:

1. Reassess Your Vendor List

• Identify vendors supporting critical operations.
• Flag material service providers as defined by CPS 230.
• Classify based on risk impact, not just contract value.

2. Strengthen Due Diligence & Monitoring

• Expand onboarding to include cyber posture, financial health, and fourth-party dependencies.
• Invest in AI-powered risk dashboards and periodic audits.

3. Update Contracts & Risk Clauses

• Embed clauses on resilience, termination rights, and incident response.
• Ensure alignment with APRA’s expectations for data privacy and liability sharing.

4. Build Exit & Contingency Plans

• Develop “Plan B” for each critical or material vendor.
• Document fallback capabilities internally or with alternate providers.

5. Collaborate Cross-Functionally

• Form working groups with Risk, Legal, IT, and Business Units.
• Align on definitions, controls, and reporting procedures.

Pro Tip: Use CPS 230 as a way to elevate procurement’s strategic role—become the resilience architect, not just the gatekeeper.

Final Thought

CPS 230 isn’t just another compliance requirement—it’s a transformational opportunity for procurement teams to lead on operational resilience.

The organisations that act now won’t just avoid regulatory penalties. They’ll be more agile, more trusted, and better protected in today’s complex risk landscape.

Next Steps for Procurement Teams

• Review APRA’s official CPS 230 guidance.
• Conduct a Material Service Provider Mapping Workshop.
• Explore AI-based solutions that offer real-time vendor risk scoring, resilience modeling, and exit readiness.

Need Help Navigating CPS 230 from a Procurement Lens?

Zycus has helped several APRA-regulated organisations embed operational resilience into procurement strategy.

Book a call with a Zycus solutions expert—we’d be happy to help.

Related Reads:

1. A Comprehensive Guide to Supplier Risk Management
2. Proactive vs. Reactive: The Importance of a Supplier Risk Management Plan
3. Top 10 Supplier Risk Management Best Practices For Procurement Professionals
4. Australia, Agentic AI & the Procurement Revolution: My ProcureCon 2025 Recap
5. 30 Procurement Leaders of Southeast Asia: CPONext 2025
6. Watch Testimonial: Anita Pelacchi Discusses Procurement Innovation at V-Line in Victoria
7. Watch Testimonial: Crown Resorts Melbourne: Procurement Transformation with Zycus
8. The Agentic AI Advantage: Unlocking Deep Value in APAC’s AI-Driven Future