As the Digital Operational Resilience Act (DORA) approaches its UK implementation on 17 January 2025, financial sector companies must ensure they are fully prepared for compliance.
Since its introduction in January 2023, DORA has been a topic of significant discussion, primarily focused on its implications for the sector and the necessary steps organisations need to take to meet its requirements.
DORA is designed to enhance the resilience of the financial sector against cyber-attacks and IT incidents, a necessity in an environment where cybercriminals continually escalate both the frequency and sophistication of their attacks. Given the sector’s responsibility for safeguarding highly valuable data, the European Union’s establishment of DORA aims to standardise security and resilience practices across the industry.
Over the last decade, numerous cyberattacks have severely disrupted financial institutions, leading to significant data losses. DORA seeks to mitigate these risks by enforcing consistent security measures across the sector. Although firms have had two years to prepare, the extensive scope of DORA means that many organisations still face substantial work to meet its requirements. Moreover, the regulation is expected to be stringently enforced, with serious repercussions for directors who fail to ensure their firm’s cyber and data resilience.
With the compliance deadline looming, financial firms must take proactive steps to ensure they meet DORA’s requirements.
Securing Employee and Stakeholder Buy-In
Achieving DORA compliance starts with securing the engagement and cooperation of employees and stakeholders. Any changes in protocol or policy require employees to be fully informed and involved in the process. This engagement ensures that adherence becomes part of the everyday operations of the business, with employees across departments understanding the specific risks and impacts of non-compliance.
Employees are often the first line of defence against cyber threats, and their active participation in the compliance process is crucial. By educating staff on the risks and equipping them with the tools and knowledge to address these challenges, companies can create a more secure and resilient operational environment.
Treating Compliance as an Ongoing Process
Compliance with regulations like DORA should not be seen as a one-time achievement but as an ongoing commitment. The financial sector faces constantly evolving cyber threats, making continuous vigilance and adaptation essential. DORA’s anticipated proactive enforcement means that firms must be prepared to address new threats as they arise, ensuring that their systems and processes remain robust.
Regular assessments and testing of policies, procedures, and technology are vital to maintaining compliance. By embedding these practices into the daily operations of the business, companies can be more confident in their ability to meet DORA’s requirements continuously.
As cybercriminals encounter stronger defences within financial institutions, they increasingly target third-party vendors as a means of gaining access to sensitive data. DORA requires financial firms to extend their security measures to include the defences of their partners and suppliers. This aspect of compliance is critical, as vulnerabilities within the supply chain can undermine even the most robust internal security measures.
Understanding and managing the security practices of all third-party vendors is essential for achieving DORA compliance. Firms must ensure that their partners adhere to the same high standards of resilience and security to protect against potential breaches.
Documenting Compliance Actions
DORA is expected to be rigorously enforced, with ongoing scrutiny from regulators. To demonstrate compliance, firms must maintain thorough documentation of all actions taken to enhance operational resilience. This includes records of risk assessments, incident reports, and the steps taken to address vulnerabilities.
Such documentation serves not only as evidence of compliance but also as a comprehensive record of the firm’s efforts to strengthen its cybersecurity and IT resilience. This ongoing record-keeping will be crucial in responding to regulatory checks and ensuring continued adherence to DORA’s requirements.
Leveraging External Expertise
For many financial firms, the complexity of DORA compliance, combined with the day-to-day demands on IT teams, can be overwhelming. As a result, some companies are turning to external consultancies that specialise in regulatory compliance and cybersecurity. These experts can provide the necessary guidance and support, ensuring that firms meet DORA’s requirements without overburdening internal resources.
By bringing in specialised expertise, firms can alleviate pressure on their teams and gain confidence that their compliance efforts are on track. Additionally, external consultants can offer valuable insights into best practices for managing cyber threats, helping to keep the firm’s data secure and its operations resilient.
As the deadline for DORA compliance approaches, financial sector firms must prioritise these key steps to ensure they are fully prepared. With the right strategies and support in place, organisations can achieve compliance and strengthen their overall resilience against cyber threats.
