Preliminary Steps for for DORA Compliance
Review the regulation in detail and analyze your organization’s operations to see if it qualifies as a financial entity or critical third-party information and communication technology (ICT) service provider.
Understand the specific requirements relevant to your organization’s role within the financial ecosystem, such as ICT risk management or incident reporting.
Identify where existing ICT risk management frameworks and practices diverge from DORA’s requirements per Article 5(Article 5).
Evaluate current governance structures, ICT incident response protocols (Article 17), third-party risk management (TPRM) strategies (Articles 28-30), and resilience testing measures to ensure alignment with DORA.
Review existing documentation, such as business continuity plans and ICT policies, to identify weaknesses or areas requiring updates.
Define roles and responsibilities to ensure accountability for DORA compliance.
Incorporate security measures into everyday work culture to ensure it becomes engrained in the organization and not an isolated initiative.
Invest in continuous employee training covering the technical aspects of cybersecurity, legal, and compliance requirements.
Note: Who Does DORA Apply To?
The scope of DORA extends beyond traditional financial institutions. Non-EU-based companies that provide services to EU residents are also affected by DORA, meaning this has a much larger global relevance. This reach highlights DORA as a possible future global benchmark for operational resilience in the financial sector and applies to:
Banks and credit institutions
Insurers and reinsurers
Investment firms and trading venues
Payment and e-money institutions
Cryptocurrencies
ICT service providers that support these entities, including cloud service providers, data analytics firms, and software vendors
Implementing the DORA Regulation
To ensure complete alignment with the regulation, develop an effective compliance plan. The plan should address all DORA's core elements, including timelines, resource allocation, and accountability for each compliance area.
Develop comprehensive policies and procedures to identify, assess, and mitigate ICT risks.
Develop a robust incident reporting and response process, ensuring significant ICT incidents are reported promptly to relevant authorities.
Create robust, formal processes for assessing and monitoring third-party ICT service providers, including contractual obligations and risk mitigation strategies.
Schedule and perform regular and advanced testing, such as threat-led penetration testing, to evaluate your organization’s operational resilience to withstand ICT disruptions
Develop and document business continuity and disaster recovery plans, ensuring they are capable of addressing various ICT disruptions, including cyberattacks and system failures.
Regularly test these plans through simulations and update them to reflect operational changes and emerging threats.
Notes
Compliance with DORA goes beyond meeting regulatory requirements; it provides significant benefits to organizations, including:
Enhanced Operational Resilience: Strengthened systems and processes ensure organizations can withstand and recover from disruptions effectively.
Improved Stakeholder Trust: Adherence to DORA demonstrates a commitment to safeguarding stakeholders' interests and building confidence among clients, investors, and regulators.
Risk Reduction: Proactive risk management minimizes the likelihood of operational failures and associated financial losses.
Competitive Advantage: Organizations with robust resilience measures are better positioned to attract customers and partners in a highly regulated environment.
Implement comprehensive training programs for all employees, focusing on the following to maintain digital operational resilience:
Incident Response Training
Conduct drills and simulations to prepare teams for ICT-related disruptions.
Ensure employees understand reporting procedures and recovery protocols.
Cybersecurity Awareness Training
Train staff to identify and respond to cyber threats, such as phishing or malware, to reduce the likelihood of incidents.
Role-Tailored Training
Provide role-specific training for individuals involved in ICT risk management, third-party oversight, and governance activities.
Continuous Education o Update training programs regularly and incorporate lessons learned from incidents, new regulatory guidance, or emerging threats.
Notes
Fostering a culture of accountability and resilience ensures that all employees understand the importance of maintaining operational stability.
Employee preparedness is a cornerstone of digital operational resilience, and fostering a culture of accountability and resilience ensures that all employees understand the importance of maintaining operational stability. Organizations need to invest in comprehensive training to facilitate this.
Preparing for the External Audit
Establish frameworks to identify, assess, and manage ICT risks. These frameworks must have policies, procedures, and controls made to handle potential threats.
Develop incident management protocols to respond to ICT disruptions fast and effectively. Protocols include clear reporting to let regulators know of incidents in predefined time frames.
Regular testing, including penetration tests, stress tests, and other resilience assessments. These actions ensure that systems can withstand operational pressures.
Given reliance on ICT service providers, organizations must monitor and mitigate risks associated with outsourcing. These actions include conducting due diligence, enforcing contractual obligations, and ensuring service continuity.
Encouraging information exchange between industry stakeholders enhances collective defenses against emerging threats
Address outdated or inadequate ICT risk management systems.
Resolve insufficient third-party oversight.
Correct high-frequency incident-prone systems.
Adopt a risk-based approach to allocate resources effectively and minimize the potential impact of ICT disruptions during the compliance process.
Engaging in the Certification Audit & Beyond
Assign a company liaison to facilitate communication with the external audit team.
Conduct both internal and external audits to assess compliance with DORA and identify areas for improvement.
Develop plans to address any non-conformities identified during the audit with corrective actions.
Ensure all outstanding issues are resolved before the certification is granted.
Stay Informed: Regularly monitor updates from European Supervisory Authorities (ESAs) and other regulatory bodies regarding DORA guidelines, clarifications, and enforcement practices.
Policy Review: Periodically review and update your policies and procedures to reflect any regulatory changes
Engage in Industry Groups: Participate in industry forums or associations to stay abreast of best practices and regulatory developments.
Consult Experts: Engage regulatory or legal experts to interpret updates and assess their implications for your organization.
Proactive Adjustments: Anticipate and address potential compliance challenges by aligning internal systems and processes with forthcoming changes.
Testing and Validation: Perform frequent ICT resilience tests, such as penetration testing, tabletop exercises, and system recovery drills, to identify weaknesses and refine strategies.
Feedback Loops: Use insights from incidents, testing, and audits to improve processes, tools, and training programs.
Regular Audits: Conduct internal and external audits to assess the effectiveness of your ICT risk management, incident response, and third-party oversight measures.
Keys to Success
DORA provides financial institutions with clarity and consistency in managing operational resilience and is a big step in protecting the EU’s financial sector against risks.
By understanding DORA’s scope, assessing current practices, and implementing a comprehensive compliance plan, organizations can ensure they are prepared for 2025 and beyond.
Adopting a mindset of continuous improvement ensures that your organization remains resilient and compliant even as the regulatory landscape and technological threats evolve.
By following this comprehensive checklist, your organization will be well-prepared to achieve DORA compliance, ensuring consistency and success in managing robust risk management practices.
