EU DORA Compliance: A Comprehensive Guide

The Digital Operational Resilience Act (DORA) is an EU regulation aimed at enhancing the digital resilience of financial institutions. This guide details DORA's requirements for risk management, incident reporting, and resilience testing.

What's in this guide?

What is DORA? ● Key Objectives of DORA ● Who is DORA Relevant For? ● Preparing for DORA Compliance ● Detailed Steps for DORA Compliance ● What is Signicat's role?

DORA in short

What is DORA?

The Digital Operational Resilience Act (DORA) is a regulation enacted by the European Union to strengthen the digital operational resilience of financial institutions. It aims to ensure that financial entities can withstand and recover from all types of ICT-related disruptions and threats. DORA introduces stringent requirements for risk management, incident reporting, and resilience testing, and it establishes a framework for oversight and enforcement by competent authorities.

By harmonizing these standards across the EU, DORA seeks to enhance the stability and security of the financial sector, protect consumers, and maintain market integrity in an increasingly digitalized landscape. DORA is set to come into effect on January 17, 2025.

Read the regulation on EUR-Lex

Objectives

Key Objectives of DORA

Enhancing IT security and operational resilience

DORA aims to ensure that financial institutions can withstand, respond to, and recover from all types of ICT-related disruptions and threats.
Harmonizing regulations

By creating a unified framework, DORA seeks to reduce regulatory fragmentation and create a level playing field across the EU.
Protecting consumers and financial stability

Ensuring the operational resilience of financial entities helps protect consumers and maintain the stability and integrity of the financial system.

Who is DORA Relevant For?

DORA applies to a wide range of financial entities within the EU, encompassing both traditional financial institutions and various other stakeholders in the financial ecosystem.

- Banks and credit institutions: As primary players in the financial system, banks must comply with DORA to ensure their operations remain resilient against disruptions.
- Insurance companies: These entities must secure their operational processes to protect policyholders and maintain trust.
- Investment firms: Investment firms need to safeguard their operations to ensure continuous service delivery and protect investor interests.
- Payment service providers: These entities must ensure their systems are resilient to avoid disruptions in payment services.
DORA also extends its requirements to critical third-party providers, such as cloud service providers, data analytics companies, and other ICT service providers that offer essential services to financial institutions. These providers play a crucial role in the operational resilience of financial entities and must adhere to the same standards to ensure the robustness of the financial system.
- Regulators and supervisory authorities: They need to oversee the implementation and compliance with DORA.
- Financial market infrastructures: These entities, which include central securities depositories and trading platforms, must ensure their systems are secure and resilient.
- Outsourcing service providers: Any third-party service providers that handle critical or important functions for financial entities must comply with DORA's requirements.

Preparing for DORA Compliance

To achieve DORA compliance, financial entities and relevant stakeholders must undertake several key steps. Preparation involves understanding the requirements, implementing necessary changes, and continuously monitoring and improving operational resilience measures.

The first step towards compliance is to thoroughly understand the requirements set forth by DORA. This includes familiarizing oneself with the specific articles and guidelines within the regulation. Key areas of focus include:
- Risk management framework: Developing a comprehensive risk management framework that addresses ICT risks.
- Incident reporting: Establishing processes for reporting ICT-related incidents to the relevant authorities.
- Digital operational resilience testing: Regularly testing the resilience of systems and processes.
- Information sharing: Participating in information-sharing arrangements to enhance collective security.
- Third-party risk management: Ensuring that third-party providers adhere to DORA requirements.
Once the requirements are understood, financial entities must implement the necessary changes to comply with DORA. This involves:
- Developing robust policies and procedures: Creating and updating policies and procedures to address DORA requirements.
- Enhancing ICT infrastructure: Investing in technology and infrastructure to improve resilience and security.
- Training and awareness programs: Educating employees about the importance of operational resilience and their roles in achieving compliance.
- Conducting risk assessments: Regularly assessing and mitigating ICT risks through comprehensive risk assessments.
Achieving DORA compliance is not a one-time effort but requires ongoing monitoring and improvement. Financial entities should:
- Conduct regular audits and assessments: Periodically review and assess compliance with DORA requirements.
- Implement continuous improvement processes: Use findings from audits and assessments to continuously improve operational resilience measures.
- Stay updated with regulatory changes: Keep abreast of any updates or changes to DORA and adjust compliance efforts accordingly.

Detailed Steps for DORA Compliance

Organisations can take these seven steps to prepare for DORA compliance.

Step 1: Establish a Governance Framework

A robust governance framework is essential for overseeing DORA compliance efforts. This includes:

Appointing a DORA compliance officer: Designate a senior executive responsible for overseeing DORA compliance.
Forming a compliance committee: Create a committee comprising members from various departments to ensure comprehensive compliance efforts.
Developing a compliance strategy: Outline a clear strategy for achieving and maintaining DORA compliance.

Step 2: Conduct a Gap Analysis

Performing a gap analysis helps identify areas where current practices fall short of DORA requirements. This involves:

Mapping current practices to DORA requirements: Compare existing policies, procedures, and controls against DORA guidelines.
Identifying gaps and weaknesses: Highlight areas that need improvement to meet compliance standards.
Developing a remediation plan: Create a detailed plan to address identified gaps and enhance operational resilience.

Step 3: Enhance Risk Management Practices

Improving risk management practices is crucial for DORA compliance. This includes:

Developing a risk management policy: Create a policy that outlines the approach to managing ICT risks.
Conducting regular risk assessments: Perform thorough risk assessments to identify and mitigate potential threats.
Implementing risk mitigation measures: Develop and implement controls to address identified risks and enhance resilience.

Step 4: Strengthen Incident Reporting and Response

Effective incident reporting and response mechanisms are vital for DORA compliance. This involves:

Establishing incident reporting protocols: Create clear procedures for reporting ICT-related incidents to the relevant authorities.
Developing an incident response plan: Outline steps for responding to and recovering from ICT incidents.
Training employees on incident response: Educate employees on their roles and responsibilities in incident response.

Step 5: Conduct Digital Operational Resilience Testing

Regular testing of digital operational resilience is a key requirement of DORA. This includes:

Developing a testing strategy: Create a comprehensive strategy for testing the resilience of systems and processes.
Conducting regular tests: Perform regular resilience tests, including penetration testing and scenario-based testing.
Analyzing test results: Review and analyze test results to identify weaknesses and areas for improvement.

Step 6: Enhance Third-Party Risk Management

Ensuring that third-party providers comply with DORA requirements is critical. This involves:

Assessing third-party risks: Evaluate the risks associated with third-party providers and their impact on operational resilience.
Developing third-party risk management policies: Create policies and procedures for managing third-party risks.
Monitoring third-party compliance: Regularly assess and monitor third-party providers to ensure they adhere to DORA requirements.

Collaboration and information sharing are essential for enhancing collective security. This includes:

Participating in information-sharing initiatives: Engage in industry-wide information-sharing initiatives to stay informed about emerging threats.
Collaborating with other entities: Work with other financial entities to share best practices and enhance collective resilience.
Reporting to regulators: Ensure timely reporting of incidents and compliance efforts to regulatory authorities.

Security & Compliance

It's all about trust

Signicat is taking the necessary steps to meet DORA requirements, and to ensure a smooth transition for our customers.

We deliver business-critical services to Europe's largest companies. Our operations, systems, development and support processes already comply with the strictest standards for ICT risk management, incident reporting, and third-party service oversight – including ISO/IEC 27001, SOC2 and other standards.