What is DORA and what does it mean for you company?

The Digital Operational Resilience Act (DORA) is a significant regulatory initiative by the European Commission (EU) aimed at enhancing the cybersecurity measures within the EU financial services sector. With an effective date set for January 2025, DORA mandates crucial steps to fortify the resilience of key participants in the financial system against the escalating threats of cyber-attacks and other risks.

DORA encompasses a comprehensive set of regulations designed to consolidate and elevate Information and Communications Technology (ICT) risk requirements across the financial sector. This framework ensures that all participants adhere to a common set of ICT risk standards, creating a unified and robust defense against potential disruptions.

The core objectives of DORA are centered around risk management, incident reporting, resiliency testing, third-party risk management, and information sharing. These requirements oblige financial institutions, as well as critical third-party providers like Cloud Service Providers (CSPs), to implement specific processes and procedures.

Main requirements

Companies falling under DORA’s purview are obligated to meet five primary requirements:

1. Incident Response Plan: Firms must develop a detailed incident response plan, outlining the definition of a cyberattack, appropriate employee responses, and procedures for restoring operations following a security breach.
2. Cybersecurity Program: A comprehensive cybersecurity program, including risk assessments of potential cyber threats and corresponding mitigation plans, is mandated.
3. Security Controls: Companies must maintain robust security controls over their digital infrastructure, encompassing encryption, authentication, access controls, audit trails, monitoring systems, event management systems, and incident response plans.
4. Incident Reporting: Timely reporting of incidents is required, allowing regulators to assess vulnerabilities and provide recommendations for enhancing security postures.
5. Continuity of Service: Establishing a plan to ensure the continuity of service during disruptions is essential for compliance.

The oversight framework outlined by DORA places responsibility on EU Financial Regulatory authorities to audit and evaluate companies’ controls, ensuring adherence to DORA-specified standards and the ability to maintain a secure and resilient environment for handling financial data.

It is noteworthy that the impact of DORA is not limited to the EU, as regulatory bodies, including the U.S. Securities and Exchange Commission (SEC), have introduced parallel proposals. In response to these developments, companies such as SS&C Advent are actively aligning with DORA’s requirements, emphasizing the importance of security, compliance, and resilience in today’s ever-evolving digital landscape.

Which organizations come under DORA?

DORA makes it necessary for financial companies to oversee and manage the risk posed by the suppliers they work with. This applies to both individuals and organizations providing services to these financial companies—they need to follow DORA’s rules.

However, it’s important to know that DORA doesn’t apply to everyone in the financial sector. Some are exempt, such as institutions managing retirement plans for fewer than 15 people, small businesses like insurance intermediaries, and certain other entities. You can find the full list in Article 2.3.

Timeline for meeting DORA requirements

DORA was officially approved on January 16, 2023, and financial institutions have two years to get everything in place. This means they need to follow DORA’s rules by January 17, 2025. Even though it might seem like there’s a lot of time, it’s a good idea for financial companies to begin adopting the new rules now. They don’t have to wait until the last minute—they can start making changes to meet the requirements.

How we can help?

At Z3X, we understand the challenges that businesses face in adapting to the Digital Operational Resilience Act (DORA) regulations. With our expertise in navigating regulatory frameworks, we are here to support your company in ensuring compliance with DORA requirements.

Our tailored solutions are designed to assist financial entities in implementing the necessary measures outlined by DORA. From developing comprehensive risk management frameworks to establishing robust incident response plans, our team at Z3X is well-equipped to guide your business through the entire process.

We offer a proactive approach, helping your organization get ahead of the curve and start the implementation process well in advance. By leveraging our knowledge and experience, you can streamline the adoption of DORA regulations, ensuring a smooth transition while minimizing disruptions to your operations.

Partner with Z3X to not only meet regulatory obligations but also to enhance the overall resilience and security of your business in the evolving digital landscape. Our commitment is to provide practical solutions that align with the specific needs of your organization, making the journey toward DORA compliance efficient and effective. Let Z3X be your trusted partner in navigating the complexities of regulatory compliance and safeguarding the future of your business.

You can find full DORA regulation here.