Australia: APRA releases final "Prudential Practice Guide CPG 235 - Managing Data Risk"

Last Updated: 20 November 2013
Article by Alec Christie and Rose Bollard

The Australian Prudential Regulation Authority ("APRA") has issued the final version of its new prudential practice guide, "Prudential Practice Guide CPG 235 - Managing Data Risk" ("Data Guide"). The Data Guide aims to assist financial institutions, general and life insurance companies and superannuation funds regulated by APRA ("Entities") manage their data risks. This final version of the Data Guide has few changes from the draft released in December 2012.

The Data Guide compliments APRA's earlier IT security guide, Prudential Practice Guide CPG 234 - Management of Security Risk in Information and Information Technology ("IT Guide").

The Data Guide focusses on common "weak areas" of data risk management identified by APRA through its ongoing supervisory activities of Entities. This targeted approach means the Data Guide is relevant to all Entities – whether by providing alerts to new risks or guidance to improve current practices. It also signals that APRA's current focus and efforts will be directed to monitoring and enforcement of compliance by Entities with the Data Guide.


Clearly, data plays a key role in the structure and operations of all Entities and APRA believes that such reliance on data means that it is crucial that all Entities understand and effectively manage their data quality and risks, in addition to any obligations under the IT Guide, the privacy law or otherwise.

APRA notes that a strong data risk management system protects against a range of potential risks to Entities including:

  • fraud due to data theft;
  • business disruption due to data corruption or unavailability;
  • failure to provide deliverables due to inaccurate data; and
  • breach of legal or regulatory obligations due to disclosure of sensitive data.

APRA warns that protecting against these risks (along with the matters identified in the IT Guide) is not just the task of the risk management team of an Entity but also the responsibility of senior management and technical specialists within the Entity. The Data Guide reinforces this shared responsibility approach throughout, providing guidance for all such groups within the Entity.


Some of the key issues identified by APRA and recommendations in the Data Guide are:

  • Take a systematic and formalised approach to data risk management – Data risk management should not be tackled by Entities in an ad hoc or fragmented way. Rather, Entities should take a principles–based approach and put in place an overarching framework. As part of this process, Entities must consider how their framework can ensure their ongoing compliance with regulatory and legal requirements and how they can formalise roles and responsibilities within the Entity.
  • Assess and manage data quality – Data quality is important and can be assessed through a range of factors, such as accuracy, completeness, consistency and availability of information. The relevance of each of these factors will vary depending upon the nature of the data.
  • Promote staff awareness – Staff must have appropriate training so that they are aware of their responsibilities in relation to data risk management and the Entity's processes and procedures.
  • Implement suitable processes for each stage of the data life–cycle – The stages of the data life–cycle (data capture, processing, retention, publication and disposal) raise different data risk issues and so appropriate processes must be tailored by the Entity to each stage of the data life–cycle. For example, at the "data capture" stage, Entities should consider specifying data quality requirements and mechanisms in agreements with both internal and external third parties. At the publication stage (if applicable), Entities should consider validation and monitoring controls to ensure the published data continues to meet the specified requirements of users.
  • Address risks arising from outsourcing or offshoring of data – Sending data overseas may increase data risk because the data life– cycle controls of an Entity will often be inadequate and it may be more difficult for the Entity to comply with legislative and prudential requirements. Entities should carefully assess the risks associated with transferring data overseas before entering into such an arrangement. Entities should ensure that they will still be able to meet their legislative and prudential requirements and maintain the quality and integrity of critical or sensitive data.
  • Validate data prior to further processing – Data must be assessed against business rules to determine its "fitness for use" by the Entity prior to further processing. Data validation incorporates verification of format, type, value range, currency, consistency and completeness. The data validation process must be appropriate for the criticality of data and the risk of degradation. APRA recommends documenting the process as it can be useful for designing data quality metrics.
  • Implement monitoring processes to identify data issues – Entities must implement monitoring processes so that data issues are identified and rectified as early as possible. Such monitoring processes must be developed and implemented to manage all stages of a data issue: detection, investigation, resolution and adjustment of controls to reduce the risk of similar issues reoccurring.


The Data Guide, building from the foundations of the IT Guide and in addition to existing obligations under privacy law, reflects APRA's increased focus on the importance of data risk management at all stages of the data life–cycle for Entities and APRA's "recommendation" that Entities take a systematic and formalised approach to data risk management.

We recommend that Entities become familiar with the Data Guide (as they have with the IT Guide) and ensure compliance by taking, at least, the following steps:

  • review the Entity's data risk management framework, processes and procedures to ensure they are suitable for your business objectives and provide sufficient protection to the Entity;
  • assess whether existing data processes and procedures are appropriate for each stage of the data life–cycle and implement new processes if a shortfall is identified;
  • consider whether any changes in the Entity's activities or procedures give rise to new data risk issues that you need to address (eg moving data to the Cloud);
  • ensure that there are sufficient monitoring processes in place to identify potential data issues and that an assurance program is established to assess whether data quality is appropriate and the Entity's data risk management is effective; and
  • implement ongoing monitoring of the data life-cycle within the Entity to ensure any future risks are identified and managed/minimised as soon as possible.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions