Its objective is to enhance the IT security of financial institutions including banks, insurance companies, and investment firms, ensuring that Europe's financial sector can maintain its resilience during significant operational disruptions. DORA standardizes the operational resilience regulations across the financial sector, affecting 20 different kinds of financial entities and ICT third-party service providers.
The Digital Operational Resilience Act (DORA) emerges in response to the increasing digitalization of financial services. While offering numerous benefits, it also exposes the sector to heightened cybersecurity risks. The surge in cyberattacks and technology failures has demonstrated the critical need for robust regulatory frameworks to ensure the operational resilience of the financial system. The regulation aims to consolidate and upgrade ICT security regulations across the European Union, ensuring a standardized approach to cybersecurity for financial entities.
DORA was proposed as part of the European Commission’s digital finance package in September 2020. Following negotiations and amendments, it was officially adopted by the European Parliament and the Council in 2022. DORA entered into force on January 16th, 2023. The regulation is taking full effect 24 months after its adoption. This means that entities subject to the regulation are expected to be compliant until January 17th, 2025.
The Digital Operational Resilience Act (DORA) outlines a comprehensive set of requirements designed to fortify the cybersecurity frameworks of financial entities within the EU. These requirements target several key areas. From risk management to third-party interactions, they ensure that all aspects of ICT security are properly addressed. Below, we list each of these requirements providing insights into what organizations must do to comply and ultimately strengthen their digital operational resilience.
Entities are required to implement comprehensive management frameworks to identify, assess, and mitigate ICT risks. This includes establishing clear governance structures with defined roles and responsibilities to effectively manage ICT risks.
DORA mandates a robust incident response mechanism. Financial entities must be able to detect and manage ICT-related incidents promptly. Additionally, they need to report major incidents to the competent authorities, facilitating a swift and coordinated response to mitigate impacts.
Regular testing is crucial under DORA. Entities must conduct and participate in resilience testing exercises, including vulnerability assessments and penetration tests, to evaluate their defenses against potential cyber threats and identify areas for improvement.
Recognizing the increasing reliance on third-party service providers, DORA emphasizes the need for stringent third-party risk management practices. Financial entities must ensure that their third-party vendors comply with DORA standards to avoid introducing new vulnerabilities into their operations.
DORA encourages and sometimes mandates information sharing regarding ICT risks and incidents among financial entities. This practice aims to foster a collective approach to threat intelligence and defense strategies, enhancing the sector's overall resilience.
DORA applies broadly across the financial sector, including banks, insurance companies, investment firms, crypto-asset service providers, and critical third-party service providers to these entities. It covers a wide spectrum of financial activities within the EU, ensuring that all relevant players contribute to the sector's digital resilience.
A comprehensive list of entities affected by the Dora regulation:
For organizations within its scope, DORA introduces stringent compliance obligations aimed at strengthening ICT protocols, incident management, and continuity practices. It highlights investments in technology and governance frameworks, potentially leading to initial overhead costs but ultimately contributing to a more resilient digital operational environment.
By addressing these aspects, financial institutions and related entities can ensure not only compliance with DORA but also a significant strengthening of their operational resilience in the digital age.
ASEE can significantly strengthen your organization's cybersecurity capabilities in alignment with the stringent demands of DORA. Our suite of solutions addresses critical aspects of ICT risk management and governance. By implementing advanced measures like Identity and Access Management (IAM), Single Sign-On (SSO), and Multi-Factor Authentication (MFA) you minimize the risk of unauthorized access. Also, Adaptive and Passwordless Authentication make the user experience for employees seamless and frictionless.
Our commitment to robust incident response and digital resilience reflects in our offerings such as Mobile Application Shielding and Inact AI/ML fraud monitoring. These technologies are designed to protect your applications from emerging threats and continuously monitor for fraudulent activities, ensuring detection and quick response to incidents.
With ASEE’s comprehensive cybersecurity solutions, your organization can not only meet the requirements of DORA but also advance its overall security posture. Ensure resilience and trust in the digital age! Let ASEE help you navigate the complexities of compliance and cybersecurity with confidence.
Feel free to contact us – zero obligation. Our ASEE team will be happy to hear you out.
