The Digital Operational Resilience Act (DORA) comes into force on Friday, 17th January, giving financial institutions across Europe just days to complete preparations for the wide-ranging changes introduced by the new legislation.
Designed to safeguard the financial ecosystem from cyber threats and disruption, DORA imposes stricter obligations on banks, lenders, and the third-party Information and Communication Technology (ICT) service providers they deal with.
DORA is here to raise the bar, set new standards for security collaboration, and help financial institutions keep operations running smoothly for customers. But in a complex and ever-evolving digital world, turning these regulations into reality is no simple task.
The big question: are you ready to comply? Here's what you need to know - and what to do next.
Key areas of DORA compliance
DORA sets a clear framework for financial institutions to ensure their resilience against operational disruptions. The regulation focuses on several key areas:
- ICT risk management: Institutions must identify, monitor, and manage risks related to their technology infrastructure, data, and service providers to a common risk management framework
- Incident management: Mandating clear processes for handling and reporting ICT-related incidents within strict timeframes, that conform to the DORA technical standards
- Third-party risk oversight: Increased scrutiny of critical third-party ICT service providers and onward supply chains, ensuring their operational resilience aligns with your own.
- Testing and continuity: Regular testing of critical operational systems to simulate and address potential disruptions.
- Information Sharing: Promoting collaboration among financial entities, regulators and other stakeholders around threats, vulnerabilities and widespread disruptions.
What you need to do now
Preparation is crucial to avoid the consequences of non-compliance, which include substantial fines, reputational damage and increased exposure to risk. CIOs and CSIOs should prioritise the following:
- Stay informed: Keep up with DORA updates through specialist law firm newsletters, regulatory websites, and relevant events. Tools like Google Alerts can help track changes with minimal effort.
- Conduct a gap analysis: Identify areas where your current resilience, processes, and systems fall short of DORA requirements and create a plan to address them.
- Strengthen cybersecurity and incident management: Enhance IT security measures and establish clear, tested protocols for responding to disruptions quickly and effectively, and align with DORA's Key Regulatory Technical Standards (RTS)
- Review third-party risks: Assess contracts and ensure your service providers meet DORA standards, with proper agreements in place to manage operational risks.
Lendscape is DORA-ready, with preparations underway since 2023. These have included risk framework and security control updates to comply with DORA standards, growing our Governance, Risk and Compliance (GRC) function, developing a bespoke DORA contract addendum for new and existing Lendscape customers, establishing an enhanced Trust Centre resource for customers and prospects, and partnering with cyber-security experts Littlefish to provide robust, 24/7 CSOC and SIEM capabilities.
Curious about DORA and its implications? Read our full guide for a deeper dive into the regulation and how it impacts the industry. If you have any questions or want to know more about how Lendscape aligns with DORA principles, feel free to reach out.