CPS 234 and the Financial Accountability Regime: A 2026 Cyber Consultant Guide for Australian Financial Services

For Australian financial services businesses, cyber security has moved from the IT department to the boardroom. The Financial Accountability Regime (FAR), which applies to all APRA-regulated banks, insurers, and superannuation trustees, has made individual executives personally accountable for information security compliance under APRA Prudential Standard CPS 234. A landmark enforcement action in 2026 has made clear that regulators are prepared to pursue executives — not just institutions — when cyber controls fail.

Understanding the Financial Accountability Regime and CPS 234

The Financial Accountability Regime (FAR) is the Australian government''s successor to the Banking Executive Accountability Regime (BEAR). It requires APRA-regulated entities to identify "Accountable Persons" — directors and senior executives — and document their specific responsibilities in formal accountability statements.

Under the FAR, Accountable Persons must not merely oversee policies but actively satisfy themselves that risk management processes are functioning as intended. Failure to do so exposes these individuals to potential civil penalty action from APRA and ASIC.

APRA Prudential Standard CPS 234 (Information Security) is the binding instrument that governs how APRA-regulated entities must manage information security. It requires entities to maintain an information security capability commensurate with the size and extent of threats to their information assets, implement controls to protect those assets, and notify APRA of material information security incidents within 72 hours.

The intersection of FAR and CPS 234 means that for the first time, a named executive — not just the institution — can be held personally accountable for failures in cyber security governance. This is a fundamental shift in how Australian financial services businesses must approach cyber risk management.

The Bendigo and Adelaide Bank Enforcement Action

In August 2026, APRA commenced legal proceedings against Bendigo and Adelaide Bank Ltd (BAB) — a landmark case that sent a clear warning to the entire financial services sector. BAB admitted to breaching obligations under the predecessor regime (BEAR) and failing to maintain adequate customer authentication controls and systematic testing programs for information security, as required under CPS 234.

The case highlighted several systemic failures that regulators are now scrutinising across the sector, including inadequate multi-factor authentication for high-risk activities, insufficient management reporting on cyber control effectiveness, and a failure to conduct systematic, independent testing of information security controls.

For cyber consultants advising APRA-regulated entities, this enforcement action underscores that "check-box" compliance is no longer sufficient. Regulators expect evidence that controls are not only in place but are effectively functioning — and that Accountable Persons can demonstrate they have actively satisfied themselves of this.

Key CPS 234 Obligations for Accountable Persons

A cyber consultant working with APRA-regulated entities must help Accountable Persons understand and discharge their specific obligations under CPS 234. The following are the most critical requirements.

• Information asset classification — entities must maintain a comprehensive inventory of information assets, including AI tools and third-party systems, classified by criticality and sensitivity
• Control implementation — controls must be implemented to protect information assets commensurate with the assessed risk, including multi-factor authentication for privileged access and high-risk activities
• Independent testing — CPS 234 requires systematic testing of controls by functionally independent specialists, with results escalated to the Board if deficiencies cannot be remediated promptly
• Third-party management — entities must assess the information security capability of third-party service providers and ensure contractual protections are in place
• Incident notification — material information security incidents must be notified to APRA within 72 hours, with a more detailed report within 10 business days
• Board reporting — the Board must receive regular, meaningful reporting on the entity''s information security posture and any material control weaknesses

Common Gaps a Cyber Consultant Will Identify

When a cyber consultant conducts a CPS 234 gap assessment for an APRA-regulated entity, the following deficiencies are most commonly identified. Each represents a potential enforcement risk under the FAR if an Accountable Person cannot demonstrate they were aware of and addressing the gap.

• Incomplete information asset registers — many entities have not catalogued AI tools, shadow IT, or third-party SaaS applications as information assets, leaving significant gaps in their control framework
• Inadequate authentication controls — APRA has specifically identified credential stuffing and legacy authentication as systemic weaknesses; MFA must be enforced for all privileged access and high-risk customer transactions
• Point-in-time testing — conducting penetration testing or control reviews once a year is insufficient; CPS 234 expects a systematic, ongoing testing program with documented results
• Weak management reporting — Boards often receive high-level cyber dashboards that do not provide meaningful insight into control effectiveness; APRA expects "fit-for-purpose" reporting that enables informed oversight
• Unmanaged third-party risk — entities frequently lack visibility into the security posture of their technology vendors, particularly for AI and cloud services
• Accountability statement gaps — FAR accountability statements often do not clearly map to specific CPS 234 operative paragraphs, creating ambiguity about who owns the risk

Australian Regulatory Context

CPS 234 applies to all APRA-regulated entities, including authorised deposit-taking institutions (ADIs), general and life insurers, private health insurers, and registrable superannuation entity (RSE) licensees. The standard has been in force since 2019, but its interaction with the FAR has significantly raised the stakes for individual executives.

APRA''s enforcement posture has shifted materially in 2026. The regulator has made clear that it expects entities to proactively identify and remediate control weaknesses, rather than waiting for an incident to occur. Entities that self-identify and report material control weaknesses to APRA are treated more favourably than those where weaknesses are discovered through supervisory activity or an incident.

ASIC also has an interest in cyber security governance for Australian financial services licensees (AFSLs). Under the Corporations Act, licensees must have adequate risk management systems, and ASIC has indicated that cyber security is a component of this obligation. The Australian Cyber Security Centre (ACSC) Essential Eight framework is widely used as a benchmark for demonstrating "reasonable steps" under both CPS 234 and the Privacy Act.

How to Choose a Cyber Consultant for CPS 234 Compliance

Not all cyber consultants have the expertise to navigate the intersection of CPS 234, the FAR, and the broader APRA prudential framework. When selecting a cyber consultant for a financial services engagement, consider the following criteria.

• APRA regulatory experience — the consultant should have direct experience with CPS 234 gap assessments and remediation programs for APRA-regulated entities
• Independence — CPS 234 requires testing by functionally independent specialists; a consultant who also implements controls may not satisfy this requirement
• Board reporting capability — the consultant should be able to translate technical findings into meaningful Board-level reporting that supports informed oversight
• FAR alignment expertise — the consultant should understand how to map accountability statements to CPS 234 operative paragraphs and help Accountable Persons discharge their obligations
• Incident response experience — given the 72-hour notification requirement, the consultant should have experience supporting entities through APRA incident notifications

How MyMoney® Can Help

For APRA-regulated entities navigating the intersection of CPS 234 and the Financial Accountability Regime, the right cyber consultant is not a luxury — it is a regulatory necessity. The personal accountability obligations created by the FAR mean that Accountable Persons cannot afford to rely on inadequate or outdated cyber governance frameworks.

MyMoney® connects Australian financial services businesses with experienced cyber consultants who specialise in APRA prudential compliance, CPS 234 gap assessments, and FAR accountability mapping. Whether you need an independent control review, a Board-ready cyber risk report, or support through an APRA notification, the right consultant can protect both your institution and your executives.

Post a Brief to describe your CPS 234 and FAR compliance needs and receive proposals from qualified cyber consultants. Or Browse Cyber Consultants on the MyMoney® Marketplace to find a specialist with the APRA regulatory experience your business requires.