Is Your AI Vendor on Your Material Service Provider Register?
APRA requires material service provider registers. ASIC found insufficient third-party AI governance at nearly all licensees reviewed.
We help you assess, manage, and monitor AI vendor relationships to satisfy regulatory requirements while enabling AI adoption.
Now Required | Material Service Provider Register Must Be Submitted to APRA
Traditional Third-Party Risk Management Wasn't Built for AI
Your organisation uses AI from Microsoft, Salesforce, AWS, or specialist vendors. Standard vendor questionnaires don't cover the risks AI creates.
Black Box Vendors
Your procurement team asks vendors for security certifications and financial statements. But do they ask whether the AI model was tested for bias? Whether your data trains their models? Whether model updates could change business outcomes without notice?
Regulatory Gaps Identified
ASIC REP 798 reviewed 23 licensees and found insufficient governance of third-party AI providers across nearly all organisations. Licensees "quickly relied on third parties for AI models but overlooked associated risks."
Board Questions Without Answers
Your board asks: "Which AI vendors are we using? Have they been assessed? What happens if their model produces biased outputs? Who's liable?" Without AI-specific vendor governance, you cannot answer these questions with confidence.
What APRA and ASIC Expect for Third-Party AI
Australian regulators are applying existing frameworks to AI vendor relationships, with specific expectations your traditional TPRM programme may not address.
APRA CPS 230: Material Service Provider Management
CPS 230 requires APRA-regulated entities to identify material service providers: those on which the entity relies to undertake critical operations or that expose the entity to material operational risk.
AI vendor implications:
- AI systems supporting critical operations (credit decisions, claims processing, customer service) may qualify as material service providers
- Material service provider register submission now required
- Pre-existing vendor contracts must comply by earlier of renewal date or 1 July 2026
ASIC REP 798: Third-Party AI Provider Governance
ASIC's review of 23 licensees (covering 624 AI use cases) found insufficient governance of third-party AI providers. The report stated licensees should "apply the same governing principles to third-party models as internally developed models."
ASIC expectations:
- Appropriate measures to select suitable AI service providers
- Monitor third-party AI performance throughout entire AI lifecycle
- Governance arrangements for third-party AI matching internal AI governance standards
AI Vendor Risk Management Aligned to Australian Requirements
We help you build AI vendor assessment and monitoring frameworks that satisfy APRA CPS 230, CPS 234, and ASIC expectations.
Regulatory-Aligned Assessment Framework
Due diligence methodology covering AI-specific risks mapped to CPS 230, CPS 234, and ASIC REP 798 requirements.
Tools and Templates
AI vendor assessment questionnaires, contract clause templates, risk rating criteria, and monitoring frameworks your teams can use immediately.
Material Service Provider Classification
Methodology to identify which AI vendors qualify as material service providers under CPS 230, supporting your register submission and ongoing compliance.
Ongoing Monitoring Programme
Framework for AI vendor performance monitoring, model drift detection, and regulatory change management.
Contract Negotiation Support
AI-specific contract clause requirements and review of vendor agreements.
Our Approach
We help you integrate AI vendor risk management into current frameworks rather than creating parallel programmes.
AI Vendor Discovery and Categorisation (Weeks 1-2)
We inventory your AI vendor relationships across the organisation, categorise by risk and materiality (critical/high/standard), and identify which vendors may qualify as material service providers under CPS 230.
Regulatory Gap Assessment (Weeks 3-4)
We assess your current AI vendor governance against APRA CPS 230, CPS 234, and ASIC REP 798 requirements. You receive a remediation roadmap with actions, ownership, and timelines.
Framework and Tools Development (Weeks 5-8)
We develop your AI Vendor Risk Management Framework including assessment methodology, due diligence questionnaires, risk rating approach, contract requirements checklist, and ongoing monitoring framework.
Implementation and Capability Building (Weeks 9-12)
We support implementation through procurement team training, pilot vendor assessments, integration with existing TPRM processes, and preparation of material service provider register for APRA submission.
Common Questions
What makes AI vendor risk different from traditional third-party risk management?
AI vendors introduce risks standard TPRM processes don't cover: algorithmic bias, training data governance, model transparency, performance drift over time, and liability for automated decision-making.
Which AI vendors qualify as material service providers under CPS 230?
Material service providers are those on which you rely to undertake critical operations or that expose you to material operational risk. AI vendors may qualify if they support critical business processes, process material volumes of customer data, make automated decisions affecting customers, or create significant operational dependency.
How does this help with the CPS 230 material service provider register deadline?
We help you identify which AI vendors qualify as material service providers, conduct required due diligence, ensure contracts contain required terms, prepare the material service provider register using APRA's template, and establish ongoing monitoring to maintain register accuracy.
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Learn more →Ready to Address Third-Party AI Risk Before Your Next APRA Engagement?
Whether you're updating your material service provider register, responding to ASIC's third-party AI governance expectations, or evaluating an urgent AI vendor procurement, we help you manage third-party AI risk with confidence.