APRA CPS 234 Compliance Guide: Requirements, Controls, Third-Parties & How to Build a Resilient Information Security Framework

TL;DR

• APRA CPS 234 is a mandatory information security standard for Australian financial institutions.
• It requires strong controls, clear governance, third party oversight and continuous testing.
• Modern institutions operate across cloud systems and APIs which increases risk.
• Compliance is difficult without visibility of data and connected systems.
• Levo helps organisations meet CPS 234 obligations with continuous API level discovery, monitoring and governance.

Introduction to APRA CPS 234

Cyber incidents in Australia continue to rise across financial services. APRA introduced CPS 234 to strengthen industry wide resilience, protect customer data and force institutions to uplift internal and third party controls.

CPS 234 is not optional. Every APRA regulated entity including banks, credit unions, insurers, super funds and outsourced service providers must comply. The standard expects information security to be built into the fabric of the organisation.

This guide breaks down everything required for compliance. It also demonstrates why modern financial systems built on APIs require automated oversight and why Levo is positioned to help organisations manage their obligations in a sustainable way.

What Is APRA CPS 234

• APRA CPS 234 is the Prudential Standard for Information Security.
• It sets out expectations for protecting information assets against threats.
• It mandates governance, controls, capability, classification, security testing, incident response and third party management.

The standard applies to

• APRA regulated institutions
• Related bodies corporate
• Material service providers including cloud, SaaS and outsourced IT providers

The standard aims to ensure that all regulated entities maintain a secure posture regardless of where their data lives.

CPS 234 Core Requirements

APRA outlines seven fundamental requirement categories. Each one places clear responsibility on senior leaders and technical teams.

• Governance and Accountability
  
  • The Board must understand security risks
  • Senior management must allocate resources
  • Roles must be clearly defined across the organisation
• Information Security Capability
  
  • Entities must have adequate skills, tools and processes.
  • Capability must be proportional to the size and risk profile of the institution.
• Information Asset Identification and Classification
  
  • Every information asset must be identified
  • Each must be classified by sensitivity and criticality
  • APIs, cloud integrations and microservices must also be included in this inventory
• Implementation of Controls
  
  • Security controls must match threats and vulnerabilities.
  • This includes access control, encryption, monitoring, network segmentation, authentication and logging.
• Security Testing
  
  • Controls must be tested regularly.
  • Penetration testing, red team exercises, scenario attacks and continuous monitoring are expected.
• Incident Management and Reporting
  
  • Incidents must be detected quickly
  • Impact must be controlled
  • Material incidents must be reported to APRA promptly
• Third Party Management
  
  • Regulated entities remain accountable even when outsourcing.
  • Third party systems must meet equivalent security standards.
  • Due diligence and ongoing monitoring is required.

Before and After CPS 234 Industry Shift

Why CPS 234 Matters to Every Financial Institution

• Regulatory Consequences - APRA has increased supervision intensity and expects high compliance maturity.
• Operational Consequences - A single control failure in an API integration or vendor system can create large scale exposure.
• Customer Trust
  
  • Australian consumers expect responsible data handling.
  • Breaches result in loss of reputation and business value.
• Competitive Advantage - Institutions that demonstrate compliance win trust and reduce operational risks.

Practical Challenges in Meeting CPS 234

While the standard is clear, implementation is not easy. Key challenges include

• Incomplete visibility of information assets
• API silos
• Fragmented third party environments
• Rapid change across cloud based systems
• Limited evidence for audits
• Manual reporting processes
• Difficulty mapping CPS 234 controls to real system behaviour

Compliance cannot be treated as a one time project. It requires continuous assurance.

Why APIs Are the Center of CPS 234 Risk

Financial institutions rely on APIs for

• Payments
• Lending
• Digital banking
• Identity services
• Vendor integrations
• Cloud applications
• Mobile apps

Each API represents an information asset that must be classified, monitored and protected. Traditional tools were not built for the interconnected and real time nature of modern API driven financial systems.

How Levo Solves CPS 234 Compliance Challenges

Levo provides a comprehensive visibility and governance layer across all API traffic and data flows. It helps organisations meet CPS 234 obligations with

• Full discovery of all APIs across cloud and on premises environments
• Continuous classification of data flowing through APIs
• Real time detection of sensitive data exposure
• Automated mapping of information assets to CPS 234 controls
• Third party API governance
• Evidence and audit ready reports
• Automated early warning signals for risk and policy violations

Levo transforms CPS 234 compliance from a manual burden into an automated and scalable process.

Interested to See Levo in Action

CPS 234 requires strong security controls, clear governance, evidence of testing and complete oversight of information assets. Traditional tools do not provide the visibility needed for API driven financial systems.

If you want to understand how Levo supports CPS 234 compliance with

• complete API discovery
• automated data classification
• continuous mapping of controls to real activity
• monitoring of third party systems
• automated incident flags
• audit ready reporting

You can book a demo with our team, we will walk you through how Levo strengthens your security posture and simplifies ongoing CPS 234 compliance.

Conclusion

• CPS 234 has reshaped information security expectations in Australia.
• It demands visibility, accountability and continuous control over data and systems.
• Modern financial institutions rely heavily on APIs which makes compliance even more complex.
• Levo provides the monitoring and governance platform that solves the hardest aspects of CPS 234 and enables institutions to operate with confidence.