A closer analysis reveals superannuation funds' assets have outpaced those of banks, with an annual growth rate of nearly 8.8% compared to banking's 4.8%. This trend suggests that before long, superannuation could very well overshadow the banking industry in size and economic significance.

Lonsdale, however, stressed that growth is not a prerequisite for the superannuation sector to profoundly influence financial stability. Nonetheless, APRA’s vision involves executing a comprehensive stress test of the national financial system to assess risks and develop a keen understanding of how economic shocks could propagate throughout the market.

The upcoming systemic evaluation will enable APRA to refine its approach towards system-wide risks. Anticipated benefits include insights into the ripple effects of industry-related risks, enhancing APRA's supervisory strategies, and paving the way for subsequent targeted and exploratory stress tests for different financial sectors.

The interconnectedness of the financial sectors was underlined with the example of the commercial property market. Lonsdale noted that banks provide its credit, superannuation funds invest capital, and insurers offer coverage— all functions essential to a stable economy. He cautioned against the potential impact of a significant market correction in commercial property values on these interlinked industries.

An additional concern raised was climate-related risks—highlighted by increases in property insurance prices and its limited availability. The compounding effects impact the credit market, influencing businesses' ability to recover after severe weather events or causing disruptions to loan repayments, and may affect superannuation funds through increased requests for early withdrawals.

APRA's proactive measures come as a warning and a strategy to safeguard the industry. As superannuation positions itself as a formidable influence in Australia's financial landscape, regulatory adaptations seem not just prudent but necessary to ensure economic resilience in the face of rapid sector growth and evolving risk factors.