Managing Data Risk – CPG235

Managing Data Risk – CPG235

APRA released its final Prudential Practice Guide 235 Managing Data Risk (CPG235) 2 September 2013. CPG235 provides guidance to Boards, senior management, risk management and technical specialists (both management and operational).

The PPG targets areas where “APRA continues to identify weaknesses as part of its ongoing supervisory activities.”

What does that tell us?

APRA’s view is that the industry still has a way to go before it handles data management satisfactorily
The responsibility for data management and data risk management, while ultimately with the Board of an Registrable Superannuation Entity (RSE), cuts across most parts of the operation
The onus is clearly on RSE licensees to ensure that appropriate data risk management is in place, and demonstrably so.

The best person at IQ Group to contact regarding CPG235 is Ron Mullins. Please continue reading below for further information.

What is involved?

The diagram below illustrates the structure that constitutes APRA’s guide to managing data risk. The fundamental purpose behind PPG235 is explained here:

“In order to ensure that data risk management is not conducted in an ad‑hoc and fragmented manner, a regulated institution would typically adopt a systematic and formalised approach that ensures data risk is taken into consideration as part of its business-as-usual processes. This could be encapsulated in a formally approved data risk management framework outlining the institution’s approach to managing data risk”.
Source: APRA Draft PPG235: Managing Data Risk (December 2012)

How your organisation can benefit from IQ Group

IQ Group have strong understanding of PPG235 requirements and principles. We can assist with the following consultation and specialist services:

  • Strategy / Business Case
  • Implementation
  • Adopting a systematic and formalised approach to managing data
  • Staff awareness
  • Data life-cycle management
  • Data validation
  • Monitoring and managing data quality issues
  • Data quality assurance
Is your fund looking to establish Direct Investment Options (DIOs) capability?

Is your fund looking to establish Direct Investment Options (DIOs) capability?

Research shows that one in five members are likely to move to a self-managed super fund (SMSF) in the next five years. However, six out of 10 of the members who expressed an interest in moving to an SMSF said the offer of direct investment capability would make them reconsider leaving1.

IQ Group has worked with two of the largest Superannuation administrators and funds to deliver DIOs capability for their members. We have walked the journey from strategy, to product design, to execution, and we know that the only way to get a DIO product off the ground is with detailed planning and high visibility across the layers of complexity.

Key considerations in planning and delivery of DIOs

Below are just some of the key considerations for planning and delivering an MDI product:

  • DIOs represent significant product change and are pervasive throughout business operations. DIO is not a bolt-on.
  • Consider how you will roll out product changes – will you do accumulation first, and pension second, or big bang?
  • Expect to spend most time and effort for Product Design on Fund Tax and Pensions
    (their commencement and cessation).
  • You will need a range of policies specific to administration
    (market halt/suspension, corporate actions, forced selling, cooling off/family law, and death benefits/reversion).
  • Can your current administrator provide this capability, or is an external provider needed?
  • You will need client-centric administration capabilities to support this for both accumulation and pensions.

How your organisation can benefit from IQ Group

IQ Group has built an independent DIOs practice that can assist funds through the full lifecycle of product design through to implementation. We have developed significant intellectual capital and hands on experience in delivering DIOs across both Trustees and Administrators. IQ Group can deliver the following:

  • Strategy / Business Case
  • Product Design
  • Solution Design
  • Vendor Selection
  • Implementation


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