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Understanding CPS 234: The Cybersecurity Standard
CPS 234 is an APRA prudential standard that sets strict information security requirements for the Australian financial sector. Intended to protect sensitive data and critical infrastructure, this regulation applies to banks, insurers, superannuation funds and their third-party vendors. With cyberattacks on the rise, compliance with CPS 234 is no longer optional — it’s a necessity for safeguarding both data and reputation.
Why CPS 234 Compliance is Critical in 2025
The threat landscape facing the financial sector continues to evolve, with targeted attacks becoming more frequent and sophisticated. As organisations leverage more third-party services, vulnerabilities increase across the supply chain. CPS 234 compliance is designed to address these risks by enforcing robust information security controls, comprehensive vendor risk management and rapid incident response.
CPS 234: Who Needs to Comply?
CPS 234 covers all APRA-regulated entities, including:
- Authorized Deposit-taking Institutions (ADIs)
- General and life insurance companies
- Private health insurers
- Superannuation funds and RSE licensees
It also extends to information assets handled by third-party service providers, ensuring that the entire ecosystem meets Australian cybersecurity regulation standards.
Key CPS 234 Compliance Requirements
To align with CPS 234, organizations must focus on several critical compliance areas:
- Robust Security Frameworks Entities must maintain security capabilities in proportion to the risks they face. This means regular reviews of technology, processes and personnel qualifications to adapt to emerging threats.
- Asset Identification and Classification A fundamental component is identifying and categorizing all information assets by sensitivity and business criticality. This enables targeted protection for your most valuable data.
- Security Policy Framework Every organization should have up-to-date policies covering all facets of information security, from access management to incident response.
- Third-Party and Vendor Oversight Due diligence is mandatory. Set contractual requirements for vendors, conduct risk assessments and ensure that third-party providers meet or exceed your own security standards.
- Continuous Testing and Auditing Security controls require ongoing testing, including simulated cyberattacks and independent audits. Organizations should be able to demonstrate that their controls are both effective and up to date.
- Incident Management and Notification Develop and actively test reporting processes and escalation paths. If a material data breach or control weakness occurs, APRA must be notified — serious incidents within 72 hours and material control failures within 10 business days.
CPS 234 Governance and Accountability
Strong governance is a core theme of CPS 234 compliance. The ultimate responsibility for information security lies with the Board of Directors. Organizations should define roles clearly, ensure cross-functional collaboration and embed reporting structures so security can be monitored and improved continuously.
Recommendations for Achieving CPS 234 Compliance
- Regularly review and update security controls to stay aligned with evolving cyber threats.
- Keep a comprehensive inventory of all assets and re-classify when changes occur.
- Engage in staff training and awareness to foster a culture of security.
- Perform ongoing vendor assessments to mitigate third-party risk.
- Test your incident response and escalation procedures at least annually.
Benefits of Strong CPS 234 Compliance
Meeting CPS 234 requirements protects your institution and builds trust with customers who expect modern data breach prevention and robust cyber defenses. Enhanced security and a well-governed framework help reduce impact from incidents, regulatory penalties and reputational risks.
Conclusion
CPS 234 compliance will remain a cornerstone of Australian financial sector cybersecurity in 2025. By strengthening information security practices, engaging with third parties transparently and preparing for rapid incident response, organisations can ensure both regulatory compliance and customer confidence.
Find out more in the full guide: https://www.corbado.com/blog/cps234