With DORA approaching, financial institutions must strengthen their cyber resilience
The clock is ticking for financial institutions across the EU as the January 17, 2025, deadline for the Digital Operational Resilience Act (DORA) approaches.
This regulation will reshape how organizations in the financial sector approach cybersecurity and operational resilience. It demands more than just technical upgrades — it calls for a strategic shift in mindset and practices.
Cyberattacks targeting financial organizations have grown more sophisticated. Last month’s breach at Finastra, a leading fintech provider serving the world’s top banks, is a stark reminder of the vulnerabilities that remain even in the most advanced systems. As financial systems grow more interconnected, DORA sets the standard for ensuring institutions can withstand, recover from, and adapt to the challenges of shifting cyber risks.
Now is the time for financial organizations to ensure they fully understand how to meet DORA’s core requirements. This will allow them to implement proactive strategies for resilience and prepare for regulatory reviews that will shape the future of operational resilience in the EU financial sector.
Understanding DORA’s core requirements
DORA represents a landmark initiative in the EU’s efforts to secure the financial sector. Unlike traditional regulations that focus solely on incident reporting or individual security measures, DORA takes a holistic approach to operational resilience. It acknowledges the increasing complexity of modern financial systems and the sector’s reliance on third-party vendors, both of which amplify the risks of disruption.
To meet DORA’s standards, organizations must strengthen their operations across five critical areas: ICT risk management, incident reporting, resilience testing, third-party risk management, and information sharing. Each of these requirements serves as a building block for creating a secure and agile financial ecosystem capable of adapting to a dynamic threat environment.
Proactive strategies such as continuous testing, enhanced third-party oversight, and robust incident reporting are key to ensuring compliance with DORA while also fortifying an organization’s security posture and strengthening their overall operational resilience.
Continuous testing and threat simulation
One-time security assessments are no longer sufficient. Continuous testing allows financial institutions to stay ahead of adversaries by simulating real-world attacks and identifying gaps in their defenses. This approach enables organizations to adapt to new tactics, techniques and procedures (TTPs) employed by cybercriminals.
For DORA compliance, institutions must ensure their testing is comprehensive, encompassing internal systems, third-party integrations and the latest threat intelligence.
Strengthening incident response protocols
In an era where the speed of response can determine the impact of a cyber incident, robust incident response protocols are a necessity. DORA’s 72-hour reporting window leaves little room for delays, making preparation essential.
Building effective response mechanisms involves more than creating a checklist. Organizations must clearly define roles, responsibilities, and workflows to streamline response efforts. By leveraging automation tools for real-time incident tracking and ensuring teams are well-trained, financial institutions can meet the regulation’s stringent requirements while minimizing operational disruption.
Enhancing third-party risk management
The interconnected nature of today’s financial sector means that third-party service providers are an unavoidable — and significant — risk factor. From cloud services to fintech solutions, the security of these partners directly affects an organization’s compliance and resilience.
DORA highlights the importance of robust third-party risk management, calling for continuous monitoring and thorough assessments of vendor security practices. Maintaining a centralized risk register and updating it regularly ensures financial institutions can stay on top of emerging vulnerabilities and make informed decisions about their vendor ecosystem.
Preparing for regulatory reviews
Compliance requires ongoing diligence and the ability to demonstrate progress during regulatory reviews. For financial institutions, this means integrating compliance into daily operations and creating systems to track and report key metrics.
A centralized reporting platform can simplify this process, consolidating data from resilience tests, incident reports and third-party assessments.
Keeping leadership informed and documenting every step of the compliance journey ensures organizations are not caught off guard during audits. By prioritizing transparency and thorough documentation, financial institutions can position themselves as leaders in operational resilience.