DORA: How Do Financial Services Need To Prepare For New Digital Resilience Standards?

Further regulation will be in place specifically for the governance of the financial services sector. Discover more about what organisations need to do for DORA compliance:

What is DORA?

The EU Digital Operational Resilience Act (DORA) is a regulatory framework designed to bolster the digital operational resilience of financial institutions across the EU.

Effective January 2025, DORA aims to ensure that financial services remain operational and secure in the face of increasing cyber threats, mandating that organisations adopt robust digital resilience measures to protect the broader financial ecosystem.

How Can Organisations Achieve DORA Compliance?

DORA is structured to address key vulnerabilities within the financial sector, outlining measures that institutions must follow to manage and respond to IT and cyber risks effectively. These include:

Governance & ICT Risk Management

Financial institutions must implement governance frameworks and risk management strategies for identifying, assessing, and mitigating IT risks. This includes monitoring digital supply chains and third-party risks associated with outsourced services.

Incident Reporting and Response

As part of DORA compliance, organisations are required to develop detailed incident response plans and report significant incidents to relevant regulators promptly. This ensures transparency and swift response to mitigate impacts on the financial system.

Testing Digital Resilience

DORA mandates regular operational resilience testing to verify that systems are prepared for a range of cyber threats, including penetration testing for larger institutions.

Third-Party Risk Management

The regulation calls for stringent oversight of third-party service providers, ensuring that organisations maintain full control over outsourced IT services, especially in critical areas such as cloud services.

How Will DORA Impact UK Companies?

While DORA is an EU regulation, its impact will likely extend to UK companies, especially those interacting with the EU financial market.

UK-based financial services firms serving EU clients or partnering with EU institutions will need to comply with DORA’s stringent standards for operational resilience, incident reporting, and third-party risk management.

Additionally, firms may need to align their internal systems to facilitate cross-border compliance and remain competitive.

For UK companies, proactively meeting DORA compliance standards can offer a strategic advantage and reduce potential barriers when dealing with EU clients and regulators.

How Should Financial Services Organisations Prepare For DORA?

To ensure DORA compliance, financial institutions need to develop a proactive approach to digital resilience, starting with:

Developing A Governance Framework

Organisations must establish comprehensive frameworks for identifying and managing ICT risks, extending this approach to third-party services. Financial institutions should define and document responsibilities, establish governance protocols, and ensure continuous risk monitoring.

Enhancing Incident Response Plans

DORA emphasises timely incident reporting, so organisations must have a clearly defined incident response and escalation procedure. Regular training on these procedures will help mitigate potential downtime and prevent cascading effects on the broader financial network.

Conducting Regular Resilience Testing

Regular resilience testing, including vulnerability assessments and penetration testing, will become essential for compliance. Testing ensures that any potential weaknesses are identified and mitigated in advance.

Securing Third-Party Providers

Since DORA holds organisations accountable for third-party risk, institutions should establish robust vendor management protocols, regularly assessing their digital service providers’ security posture and resilience.

How Can A Cyber Security Partner Assist Financial Services Organisations With DORA?

Navigating DORA’s requirements can be challenging, especially for organisations with complex IT infrastructure. A trusted cyber security partner such as ToraGuard can offer invaluable support in the following ways:

Risk Assessments and Gap Analysis

A cyber security partner can conduct comprehensive risk assessments to identify current gaps and align your operations with DORA’s requirements. Gap analyses are essential for determining where to strengthen controls and implement additional protections.

Incident Response Support

With DORA’s requirements for swift reporting and response, a cyber security partner can help develop and execute a robust incident response plan. Expert support ensures that incidents are managed efficiently, minimising reputational and operational impacts.

Continuous Monitoring & Testing

Cyber security experts can provide ongoing monitoring and testing services to keep resilience measures up-to-date, including automated threat detection, regular penetration testing, and resilience exercises. We can also implement user security testing to ensure staff resilience to cyber threats.

Third-Party Risk Management

Cyber security partners can assist in evaluating and managing the risks associated with third-party vendors, ensuring all parties align with your resilience objectives. This includes assessing your vendors’ security frameworks, conducting audits, and establishing data protection and risk mitigation protocols.

Cyber Security Preparation For DORA

With DORA coming into effect in 2025, organisations must act now to develop their compliance strategy, mitigate risks, and build a secure, resilient foundation for the future.

As an expert cyber security partner to financial services institutions, ToraGuard can help not only meet DORA’s requirements but also strengthen its overall security posture, ensuring organisations are ready for both legislation and cyber threats.

For assistance with DORA compliance from a cyber security standpoint, please get in touch with our consultants:

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