Now, entering 2025 the DORA Act will come into effect, impacting an array of financial institutions, and it’s more than time to understand DORA basics.
In today’s digital world, where innovation and risk coexist, regulatory frameworks are becoming the guideline for security. In 2024, the European financial services industry began preparing for a transformative regulatory initiative: the Digital Operational Resilience Act, commonly known as DORA.
About DORA
DORA recognizes that digital and financial systems are deeply intertwined, and disruptions in technology can have far-reaching effects on economic stability. By establishing a unified regulatory framework for managing digital risk, DORA helps financial entities bolster their resilience, making sure they can continue to serve clients effectively even when crises strike.
This regulation is not only about compliance; it’s about positioning organizations to face the digital future with confidence. By adopting the principles and measures outlined in DORA, financial institutions have the opportunity to enhance their operational capabilities, increase customer trust, and gain a competitive edge in the market.
DORA key pillars
To achieve its objectives, DORA is built around five fundamental pillars that collectively aim to bolster the digital resilience of financial institutions:
- ICT Risk Management: Financial institutions must implement comprehensive risk management frameworks to identify, monitor, and mitigate risks related to information and communication technology (ICT). This involves assessing risks from both internal systems and third-party providers.
- Operational Resilience Testing: Institutions are required to test their digital operational resilience through various assessments and simulations. These tests help identify weaknesses and ensure that systems can withstand disruptions.
- Incident Reporting: Timely detection and reporting of ICT-related incidents are crucial under DORA. Financial entities must have protocols in place to report incidents to regulators promptly, minimizing the impact on operations and customers.
- Third-Party Risk Management: Given the reliance on external ICT providers, DORA mandates that institutions manage and mitigate risks related to third parties, including cloud service providers and data centers.
- Information Sharing: DORA encourages financial institutions to share threat intelligence and information about cyber risks with relevant stakeholders. This collective approach enhances overall resilience within the financial ecosystem.
Ready with the DORA basics?
This was was meant to give you the DORA basics. But you may need to dive more into the topic.
First, if compliance is your trade, you should definitely browse the official European Commission DORA website.
Second, prepare for DORA compliance with our experts contents.
Access the webinar replay “Navigating DORA Compliance for Legal Departments”, featuring a Q&A session with Valentine Beaudouin a lawyer specialized in EU regulations.
And if you have more questions and want to see concrete ways of how a robust corporate governance solution can help you speed up processes and get ready for DORA, book a personalized demo with one of our expert today!
