Australia’s prudential regulator has been handed $58.7 million to address emerging risks areas stemming from cyber and fintech and improve its data collection capabilities

The new funding, to be provided over the next four years, is intended to support the Australian Prudential Regulation Authority (APRA) strengthen its supervision of the market in the wake of the banking royal commission.

Regulators like APRA, and to a lesser extent, the Australian Securities and Investments Commission were heavily criticised during the royal commission for their reluctance to prosecute banks whenever misconduct was revealed.

Announcing the move today alongside the reappointment of  chairman Wayne Byres, Treasurer Josh Frydenberg said the funding would allow APRA to “reinforce the resilience and soundness of [the] financial system at a time of significant reform”.

“The new funding as well as the reappointment of Mr Byres and appointment of a second Deputy Chair – Mr John Lonsdale – will support APRA in developing a stronger focus on accountability and enforcement in the financial system,” he said.

The package will be used in the first instance to strengthen its physical supervision of banks, insurers and superannuation funds by “increasing the number of frontline supervisors for the largest and most complex financial institutions”.

However APRA will also use the cash injection to enhance its ability to identity and address new and emerging risks in the areas of cyber, fintech and culture.

It will do this by building internal expertise, as well as increasing access to external technical specialists.

Cyber risk has been an area of increasing concern for the regulator more recently, in an attempt  to avoid complacency across the financial sector.

Earlier this year it revealed plans for the creation of a dedicated prudential standard for cyber security to ensure financial services firms shore up their systems against the latest trends in attack.

The hope is that the standard will improve assurance over the security capabilities of third party providers, and make regulated entities more equipped to respond to and recover from security incidents.

The funding will also be used to improve the regulator’s data collection capabilities for inter-agency information sharing.

It comes just months after the regulator went looking for a new core financial data system to replace its end-of-life Direct to APRA (D2A) data collection system.

The D2A platform is APRA’s primary data collection platform used to determine the health and capital resilience of regulated industries.

The once once-in-a-generation overhaul of its core financial data system is intended to provide the government with more timely, accurate and granular information on financial stakeholders.