Vendor Business Continuity

As organisations become more reliant on third-party service providers, the risk to operational resilience increases. Vendor Business Continuity Management (BCM) should be standard practice, not just for compliance, but to protect operations across the value chain and maintain confidence in critical service delivery.

APRA’s CPS 230 Prudential Standard on Outsourcing sets a new benchmark for operational resilience. Under this standard, organisations must assess the impact of material outsourcing arrangements and their downstream third parties. This includes maintaining visibility to identify potential failure points.

Effective validation goes beyond reviewing documentation; it encompasses an incident response process, BCM testing, and evidence of performance, as well as crisis communication strategies.

Key Actions to Validate and Strengthen BCM

1. Identify dependencies within your critical operations.
2. Determine their criticality to your business functions.
3. Include adequate contracts with business continuity management agreements, ensuring the documentation remains up to date for business continuity testing.

Through our work with clients, we have found that CPS 230 external vendors help strengthen operational resilience and business continuity capabilities across the value chain.