Welcome to our 3 part blog series on DORA. Have you heard of DORA? and no we don't mean Dora the Explorer (but yes her face is what we see too every time we say the word!)
In our increasingly digital world, the stability of our financial services is crucial and to help protect financial institutions from digital disruptions and cyber threats, to support this the European Union has introduced the Digital Operational Resilience Act, or DORA. This new set of regulations will come into force in January 2025. So with the clock ticking this article breaks down what DORA is, why it matters, and how it impacts the financial sector, and ultimately you!
What is DORA?
DORA stands for the Digital Operational Resilience Act. It's a new set of rules introduced by the European Union to ensure that financial institutions, like banks and investment firms, are well-prepared to handle digital disruptions and cyber-attacks. Think of it as a safety net for the financial sector’s digital operations.
Why Was DORA Created?
As financial institutions rely more on digital technologies, they become more vulnerable to cyber threats and IT problems. A significant cyber-attack or system failure can disrupt services, causing problems for both the institutions and their customers. DORA was created to help prevent such issues and ensure that financial institutions can quickly recover if they do happen.
Key Goals of DORA
Strengthen Cybersecurity: Ensure that financial institutions have strong security measures to protect against cyber threats.
Unified Rules: Create consistent rules across the EU, so all financial institutions follow the same standards for digital resilience.
Incident Response: Make sure institutions can quickly detect, report, and respond to digital incidents.
Third-Party Oversight: Ensure that third-party tech providers, like cloud services, also meet high standards of security and resilience.
Business Continuity: Require institutions to have plans in place to keep operations running and recover quickly after disruptions.
Governance: Ensure that senior management is responsible for overseeing digital resilience.
How DORA Affects Financial Institutions
Stronger Security Measures: Financial institutions must adopt robust cybersecurity practices to protect their systems and data.
Standardised Practices: All institutions in the EU will follow the same rules, making it easier to manage risks consistently.
Better Incident Management: Institutions need to have clear procedures for handling and reporting cyber incidents, ensuring quick and effective responses.
Vendor Management: Institutions must carefully choose and monitor their tech providers to ensure they also meet DORA’s standards.
Preparedness Plans: Institutions must develop and regularly test their business continuity and disaster recovery plans.
Accountability: Senior management must take responsibility for the institution’s digital resilience, ensuring that proper policies and procedures are in place.
The Digital Operational Resilience Act (DORA) is a crucial step towards safeguarding the EU's financial sector in the digital age. By setting high standards for cybersecurity, incident response, and third-party oversight, DORA aims to protect financial institutions and their customers from digital disruptions and cyber threats. Understanding and implementing DORA’s requirements will help ensure the stability and security of financial services across Europe.
If you're part of a financial institution, you really need to start preparing for DORA by evaluating your current cybersecurity and resilience practices. Stay informed about the latest developments and guidelines related to DORA to ensure compliance and consider seeking expert advice to help your institution meet DORA’s standards and safeguard your operations against digital risks.
In our second blog we will look at ways in which organisations can begin to prepare for DORA. Don’t let DORA become the next GDPR for your organisation and leave it to the last minute, be prepared and be protected.