APRA Issues Guidance on Cyber Control Weaknesses

The Australian Prudential Regulation Authority (APRA) has released a new set of insights regarding common cyber control weaknesses observed among regulated entities. This guidance is part of APRA’s continued effort to bolster cyber resilience across the financial sector, which includes banks, superannuation funds, and insurance companies. The latest communication builds on APRA’s previous focus on data backup security and highlights critical areas where many institutions fall short.

As detailed in APRA’s Interim Policy and Supervision Priorities update, maintaining robust cyber resilience is a top regulatory priority. APRA’s oversight extends to a broad range of financial entities, overseeing institutions holding approximately $9 trillion in assets. The regulator’s goal is to ensure these entities effectively manage and mitigate cyber risks amidst a rapidly evolving threat landscape.

APRA’s latest letter serves as a follow-up to its previous guidance on data backups, further emphasizing its commitment to enhancing cyber defenses. It outlines common vulnerabilities and provides actionable advice for entities to address these weaknesses, in line with Prudential Standard CPS 234 Information Security and Prudential Practice Guide CPG 234 Information Security.

The letter focuses on three primary areas of concern:

1. Configuration Management: Effective configuration management is crucial for maintaining system security. APRA has observed that many entities struggle with ensuring that their system configurations are secure and up-to-date. Common issues include improper settings and inadequate monitoring, which can leave systems vulnerable to exploitation. APRA advises entities to review their configuration management practices thoroughly and ensure they align with best security practices.
2. Privileged Access Management: Proper management of privileged accounts—those with extensive access rights—remains a critical area for improvement. APRA has identified lapses in controlling and monitoring these accounts, which can pose significant security risks. The regulator recommends implementing stringent access controls, conducting regular access reviews, and restricting privileges to mitigate potential threats from both internal and external sources.
3. Security Testing: Regular and comprehensive security testing is essential for identifying and addressing vulnerabilities before they can be exploited. APRA has noted that some entities fail to conduct adequate testing, such as penetration tests and vulnerability assessments, which are necessary to maintain a strong security posture. APRA encourages entities to establish a robust security testing regime to proactively address potential weaknesses.

APRA expects all regulated entities to review their cyber control environments against the weaknesses identified in the letter. Entities are advised to address any gaps that could materially affect their risk profile or financial stability. Such gaps should be reported as material security control weaknesses under paragraph 36 of CPS 234.

To assist in these efforts, APRA recommends that entities perform regular self-assessments based on sound practices outlined in CPG 234. Additionally, APRA encourages the adoption of mitigation strategies from established frameworks like the Essential Eight, which are designed to address common cyber threats and vulnerabilities.

APRA’s latest guidance underscores the regulator's proactive stance in addressing cyber risks and enhancing the resilience of the financial sector. By focusing on configuration management, privileged access, and security testing, APRA provides a clear roadmap for entities to fortify their cyber defenses and ensure compliance with regulatory standards. As cyber threats continue to evolve, APRA's insights serve as a crucial resource for maintaining a secure and resilient financial system.

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