DORA Is Here

DORA Is Here: What the Digital Operational Resilience Act Means for the Financial Sector

As cyber threats grow in frequency and sophistication, the EU is stepping up to protect the financial system with a bold new regulation: the Digital Operational Resilience Act (DORA). Formally known as Regulation (EU) 2022/2554, DORA is a game-changer for how financial entities manage ICT risks and cyber resilience.

Here’s what you need to know.

A. What Is DORA and Why Does It Matter?

DORA is the EU’s answer to an increasingly digital and interconnected financial world.

It ensures that banks, investment firms, insurers, and even crypto-asset service providers are prepared for ICT disruptions—from cyberattacks to system failures. It creates one harmonized rulebook across the EU for managing ICT risks, a long-overdue fix to previously fragmented national approaches.

B. Key Takeaways from DORA

1. Digital Resilience Is Non-Negotiable

“Increased digitalisation and interconnectedness amplify ICT risk.”

Financial firms rely on technology more than ever. DORA acknowledges this and mandates that they build robust systems for prevention, detection, containment, recovery, and repair of ICT incidents.

2. Unified Rules Across the EU

Fragmented national rules are being replaced by a single legislative framework that applies across borders. This gives companies a clear, consistent standard for compliance—especially important for multinational operations.

3. Robust ICT Risk Management Is a Must

Financial entities must develop comprehensive ICT risk management frameworks based on their size, complexity, and exposure. Think beyond checkboxes—DORA wants real operational readiness.

4. Incident Reporting Is Getting an Upgrade

DORA requires firms to report major ICT-related incidents quickly and consistently through a standardized EU-wide process. This will help regulators respond faster and better understand systemic threats.

5. Testing Is No Longer Optional

Regular testing of ICT systems and staff is mandatory. For more mature or critical firms, this includes Threat-Led Penetration Testing (TLPT)—an advanced form of ethical hacking.

6. Third-Party Risks Are Now Center Stage

“To address the systemic impact of ICT third-party concentration risk…”

Firms must closely manage their relationships with ICT vendors, especially cloud providers. DORA outlines clear principles for contracting, monitoring, and mitigating third-party risk, including oversight of subcontracting chains and vendor concentration.

7. Critical ICT Providers Will Be Regulated Too

DORA introduces an Oversight Framework for third-party providers deemed critical to the financial sector. These providers will face ongoing scrutiny by EU authorities and may need to establish a local presence in the EU.

8. Stronger Together: Info Sharing Encouraged

DORA promotes voluntary cyber threat intelligence sharing among financial entities. This collective defense strategy can help the entire industry prepare for and respond to emerging threats.

9. Tailored Approach for Small Firms

DORA uses a proportionality principle to ensure smaller firms, like microenterprises, aren’t overburdened. They may qualify for simplified frameworks based on their risk profile and business scale.

10. DORA and the NIS2 Directive Work Hand in Hand

DORA complements—but is more specific than—the NIS2 Directive. It acts as lex specialis for financial institutions, creating a more targeted cybersecurity regime without conflicting with broader EU laws.

11. Boards Are Accountable

Management bodies carry the ultimate responsibility. They must prioritize ICT risk in budgeting and strategic decisions, ensuring adequate resources are allocated for digital resilience.

C. Implications for Financial Entities

• Investments in ICT risk frameworks will likely need to increase.

• Expect more rigorous due diligence for ICT vendors.

• Testing and reporting costs may rise, especially for large institutions.

Critical ICT providers will be under the microscope, with compliance obligations of their own.

D. What’s Next?

DORA is already in force and will be fully applicable by January 2025. Here’s how you can prepare:

✅ Review and upgrade your ICT risk management frameworks
✅ Start mapping your ICT vendors and third-party relationships
✅ Engage with regulators and industry peers to align on best practices
✅ Monitor the ESAs (European Supervisory Authorities) for upcoming technical standards

E. Final Thoughts

DORA isn’t just about compliance—it’s about future-proofing the financial system. In an age where digital threats are as dangerous as financial ones, DORA brings much-needed clarity and strength to how financial firms safeguard their digital infrastructure.

If your organization hasn’t started preparing, now is the time.