What is the Digital Operational Resilience Act?
The Digital Operational Resilience Act (DORA) is an EU regulation designed to strengthen the digital operational resilience of financial entities. It ensures that firms can withstand, respond to, and recover from all types of ICT (Information and Communication Technology)-related disruptions and threats. DORA came into effect on January 16, 2023, with compliance required by January 17, 2025.
Importance of DORA
DORA addresses a critical need: the growing dependency of financial services on technology and third-party service providers. With cyber threats rising, operational resilience is no longer optional—it’s essential for maintaining financial stability, consumer trust, and regulatory compliance across the EU.
Key Benefits
- Improved Risk Management: Standardizes risk frameworks across financial entities.
- Increased Transparency: Promotes clear guidelines on incident reporting and ICT third-party risk.
- Enhanced Cyber Resilience: Encourages proactive threat detection and response.
- Greater Regulatory Alignment: Harmonizes fragmented ICT regulations across EU member states.
Key Requirements of DORA
- ICT Risk Management: Entities must implement policies, tools, and governance structures to manage ICT risks.
- Incident Reporting: Significant ICT-related incidents must be reported to the competent authority within strict timelines.
- Digital Operational Resilience Testing: Regular testing, including threat-led penetration tests (TLPT), to validate readiness.
- Third-Party Risk Management: Financial entities must manage and monitor risks associated with ICT third-party service providers.
- Information Sharing: Encourages voluntary sharing of cyber threat intelligence between financial entities.
Best Practices for Compliance
- Map Your ICT Environment: Identify critical assets, interdependencies, and vulnerabilities.
- Document and Test Incident Response Plans: Ensure readiness and fast recovery.
- Establish Governance Structures: Define clear roles and responsibilities for ICT risk oversight.
- Engage Third-Party Providers Early: Ensure they align with DORA requirements.
- Invest in Employee Training: Build awareness around cyber hygiene and reporting obligations.
DORA isn’t just a compliance exercise—it’s a framework to future-proof financial entities against growing digital risks. By embedding resilience into their operations, organizations can not only meet regulatory expectations but also earn customer trust and sustain long-term stability.
