What is DORA, and How Will It Impact You? Demystifying The Digital Operational Resilience Act
Get Ahead of the Curve and Prepare for the January 2025 Digital Operation Resilience Act Compliance Deadline with Confidence.
The financial sector is no stranger to regulations aimed at enhancing operational resilience and security. The Digital Operational Resilience Act (DORA) stands out as a crucial framework designed to bolster the operational resilience of financial institutions within the European Union. As we approach January 17, 2025 — the compliance deadline for DORA — it’s essential for financial entities to understand its requirements and prepare accordingly.
But here’s the catch: For the first time in history, organizations will only have one month’s notice to be fully compliant with new DORA regulation updates following its final release in December.
The next six months will come faster than you’d expect (especially between that December to January turnaround time). Luckily, teams can start proactively preparing today; some platforms (like Mitratech Alyne) already have draft RTS content in place, giving you the opportunity to start mapping now and the peace of mind that you can easily implement any needed updates in those last 30 days. No need for a rip-and-replace approach or huge overhaul, either. Alyne seamlessly integrates with your existing infrastructure, tools, and technology, acting as a DORA expert to help you understand and map the final draft RTS requirements and efficiently consolidate all necessary data (including that required by the EBA/ESA templates) into the Register of Information.
But implementation can take 4-6 weeks, so the time is now to start working towards your DORA compliance. Read on for some proactive steps you can take to reduce the risk of noncompliance penalties and ensure full compliance by the 2025 DORA compliance deadline.
A Quick Step Back: What is DORA?
DORA, or the Digital Operational Resilience Act, is an EU regulation designed to ensure that financial institutions can withstand, respond to, and recover from all types of ICT-related disruptions and threats. This new regulation covers a broad spectrum of ICT-related incidents, pushing beyond traditional risk management practices to include comprehensive measures for protection, detection, containment, recovery, and repair.
Before DORA, financial institutions mainly focused on capital allocation to manage operational risks. Now, DORA will introduce a more detailed approach to operational resilience, demanding robust strategies and policies to manage ICT risks effectively. This shift underscores the importance of handling data responsibly and ethically, ensuring that financial entities can maintain their operations even in the face of significant disruptions.
Understanding DORA’s 5 Key Compliance Obligations
DORA is broken down into five domains of regulation that focus on ICT and cyber security.
- ICT Risk Management and Governance: DORA will require organizations to establish a robust ICT governance framework that includes a digital resilience strategy, defined ICT risk tolerance, and detailed documentation of all ICT-related business functions and assets. This will lead to regular assessment to mitigate ICT risks, create comprehensive security policies, and provide regular security awareness training for employees.
- Incident Response and Reporting: Organizations must create a clear response plan that ensures employees are aware of reporting procedures, and classify incidents effectively. DORA also ensures that all ICT incidents are reported to relevant authorities as well as users and clients.
- Digital Operational Resilience Testing: Under DORA, organizations will need to implement a testing framework that includes regular basic ICT testing and advanced Threat Led Penetration Testing (TLPT). Any weaknesses, deficiencies or gaps must be identified and eliminated or mitigated with the execution of counteractive measures.
- Third-Party Risk Management: On top of internal compliance, organizations must assess ICT third-party providers’ security measures to ensure they also meet DORA compliance requirements. Contracts with these providers must include comprehensive monitoring and accessibility details, such as a full service level description and information on the locations where data is being processed.
- Information & Intelligence Sharing Arrangements: DORA encourages collaboration among trusted communities of other financial entities for the purpose of: raising awareness on ICT risks, minimizing ICT threats’ ability to spread, and overall enhancing the digital operational resilience of financial entities. Regularly sharing threat intelligence and coordinating efforts to identify emerging threats and vulnerabilities will help reduce risk.
The purpose of these domains is to provide a comprehensive digital resiliency framework that emphasizes the importance of continuous adaptation and improvement.
Implementing DORA Requirements
DORA requirements became enforceable 24 months after their entry into force on January 16, 2023. Therefore, financial entities are expected to comply with DORA by January 17, 2025.
But as we mentioned above: the final RTS drafts and DORA updates won’t be officially released until December 2024, leaving your team to navigate an unheard-of, one-month deadline. Compliance doesn’t happen overnight, and with this deadline approaching quickly, organizations must act now to ensure they are prepared.
As you familiarize yourself with the requirements, it is equally as important to equip your organization with the tools and knowledge needed to achieve robust operational resilience.
Automating Your DORA Compliance
While this overview provides a starting point for understanding and preparing for DORA, the regulation emphasizes the importance of continuous adaptation and improvement. As the regulatory landscape evolves, staying updated on amendments and additional guidelines is essential.
We’re only in the first 100 meters of the mile run.
In other words, working with controls is only the setup… next comes gap identification, gap analysis, creating your register, etc.
The use of automation technology offers an opportunity to streamline your efforts with a centralized and customizable platform for managing compliance with DORA and other relevant standards — as long as you choose the right platform. Clunky, larger-than-life systems won’t be agile enough to compile and keep up with DORA’s shifting updates. More agile platforms (like Mitratech Alyne) were designed to help you achieve full DORA Compliance in just 30 days.
Complying with new legislation doesn’t have to be stressful. For more information on how Mitratech can provide solutions with the DORA Framework and Regulatory Technical Standards (RTS) already configured, reach out to our team.
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