DORA - The Digital Operational Resilience Act

The Digital Operational Resilience Act (DORA), which comes into effect on January 17, 2025, is an EU regulation and directive that aims to prevent and mitigate cyber threats by establishing a comprehensive information and communication technology (ICT) risk management framework for the EU financial industry. DORA consolidates and upgrades ICT operational risk requirements that were previously addressed separately in various EU legal acts that covered the main categories of financial risk at the time of their adoption, but they did not comprehensively address all aspects of digital operational resilience.

In the EU financial industry, "digital operational resilience" means ensuring the security and reliability of network and information systems used by a financial entity, including third-party ICT services, to maintain the provision and quality of financial services during disruptions. Under the regulation, all financial entities within the scope of DORA, as described in Article 2, must ensure that they understand the ICT risks facing their organization. They must then implement the necessary processes to monitor, detect, resist, respond to, and recover from ICT-related threats and disruptions, ensuring that those measures are proportional to the potential risks.

The Key Requirements of DORA

DORA outlines the following requirements for the security of networks and information systems that underpin in-scope financial entities' business processes:

  • Establish an ICT Risk Management Framework. Establish and uphold a strong ICT risk management framework to promptly and comprehensively address risks.

  • Establish Incident Reporting Policies and Procedures. Establish procedures for the timely detection, management, and reporting of ICT-related security incidents.

  • Conduct Regular ICT System Testing. Regularly test ICT systems to ensure they can withstand potential threats. Oversee the implementation and results of vulnerability assessments and penetration testing. Use the results to enhance and strengthen ICT security measures accordingly.

  • Third-Party Risk Management. Ensure that contracts with third-party ICT service providers (including new and existing agreements) meet the requirements set out in DORA. Maintain records of information about ICT service providers and share them with competent authorities at least every three years or more frequently if using vendors for critical functions. This record should include thorough due diligence, such as contractual agreements and report information.

  • Establish Information Sharing Procedures. Effective information sharing is crucial for maintaining operational resilience, and financial entities should establish procedures for sharing information and intelligence about cyber threats and vulnerabilities.

Penalties for Non-Compliance

Due to the strict nature of the regulation, non-compliance with DORA can lead to substantial penalties. Financial institutions that fail to comply with DORA requirements may be fined up to 2% of their total annual worldwide turnover, individuals could be fined a maximum of EUR 1,000,000 for non-compliance, and failing to report a major ICT-related incident or significant cyber threats may also result in fines. Third-party ICT service providers, as designated by the European Supervisory Authorities (ESAs) in Article 31 of the Regulation, are subject to penalties for non-compliance as high as EUR 5,000,000. These penalties underscore the seriousness of DORA and the need for strict compliance, highlighting the potential risks of non-compliance.

Why Cyber Compliance?

The CyberCompliance.io team has over 20 years of experience in the information security field. We excel at tailoring robust security solutions that meet DORA's regulatory requirements for your organization, which includes crafting comprehensive information security policies, procedures, and risk assessments aligned with DORA's specific requirements that can help reduce the effort and costs required to comply with DORA. Here are some key features that we offer:

  • DORA gap analysis: We conduct a specialized DORA gap analysis to identify areas of non-compliance and recommend corrective actions. The analysis will identify priority areas for improvement and compliance enhancement and streamline your organization's resilience strategy.

  • ICT risk management framework development: We take a collaborative approach to developing an ICT risk management framework. We evaluate your organization's current state, identify vulnerabilities, and develop a customized risk management framework that includes policies, procedures, and controls to safeguard your organization's data, systems, and reputation while supporting business goals. We also offer ongoing support for the implementation, monitoring, and maintenance of the framework.

  • Incident management plan development: We apply our expertise in incident response methodologies, industry best practices, and risk assessment techniques to collaborate closely with your organization, identifying critical assets, assessing potential threats, and developing personalized incident management plans and procedures.

  • Third-party risk management: We assess risks associated with external vendors and suppliers by conducting a comprehensive risk assessment to identify vulnerabilities and prioritize concerns. This includes developing policies and procedures, conducting due diligence on potential vendors, monitoring ongoing risks, and implementing remediation strategies when necessary.

  • Information sharing and reporting: We assess your organization's information flow to identify gaps and inefficiencies and then work with you to design a new process aligned with your goals. This may involve defining KPIs, setting reporting frequency and channels, and implementing tools for information sharing.

  • Recovery testing and resilience exercises: Conducting regular tests to ensure your organization's ability to recover from disruptions.

The benefits of working with us ensure:

  • Reduced risk of regulatory fines and penalties.

  • Enhanced operational resilience and business continuity.

  • Improved customer confidence and reputation.

  • Access to industry best practices and expertise.

Schedule a consultation today to learn how we can address your specific needs and explore how our services can assist you in achieving compliance with DORA regulations.

Tools

Our approach to communication and collaboration.

Unlike many consulting firms that rely on rigid, in-house tools, we take a more flexible, client-centered approach. At CyberCompliance.io, we embrace the tools you're already comfortable with, ensuring a seamless integration where our team feels like a natural extension of yours. By working within your familiar systems, we enhance collaboration and efficiency every step of the way. Here are just some of the tools we utilize.

We utilize Slack Connect for all client communications to ensure you have immediate access to our Cyber Compliance team when you need us most, with real-time responses and continuous support right at your fingertips.

We utilize Asana to manage client projects, enabling them to collaborate, organize tasks, and track progress seamlessly. Its adaptability allows us to customize it easily to meet unique customer requirements.

We securely store all critical client documentation, policies, and procedures in Google Drive, ensuring seamless sharing and version control. Strict access management is enforced to protect sensitive information and maintain confidentiality.

We use Fathom.ai to transcribe meetings, ensuring every conversation is captured in detail. This allows participants to stay fully focused on the discussion, avoiding distractions from note-taking and providing accurate records for review.