As we approach 2025, financial institutions across the EU face the challenge of complying with the Digital Operational Resilience Act (DORA), which is set to take effect on the 17th of January. DORA is focused on strengthening cybersecurity and operational resilience across financial ecosystems, with the consequences for non-compliance ranging from regulatory fines to reputational damage and an increased risk of cyberattacks. However, while leaders must go beyond internal systems, addressing risks across their third-party vendors and ecosystems while balancing budgets and tight deadlines, DORA compliance can be simplified—and even offer new business opportunities.
Conduct a Gap Analysis
One of the primary steps towards ensuring DORA compliance involves conducting a thorough gap analysis. A gap analysis using data protection tools will help companies to review whether existing systems, processes, and risk management measures are aligned with DORA’s requirements. This step is not only essential for identifying potential vulnerabilities but also for understanding the specific areas that need improvement. This analysis will provide a clear picture of where organizations stand regarding their current operational resilience and cybersecurity measures, highlighting the aspects that require attention.
Performing a gap assessment helps institutions map out their current capabilities versus what DORA mandates. It involves critically analyzing internal and external protocols, assessing how data is managed and protected, and scrutinizing the risk management frameworks in place. In this way, a gap analysis serves as a foundational step towards DORA compliance. By identifying gaps, institutions can better allocate resources and focus their efforts on areas that need the most attention. This methodical approach ensures that no stone is left unturned, paving the way for a more resilient and compliant operation.
Develop an Action Plan
Building on the insights gained from a gap analysis, the next crucial step is to develop a comprehensive action plan. Create a detailed strategy for data security and resiliency by outlining the specific steps the organization will take to meet DORA’s standards. This involves setting realistic deadlines and assigning responsibilities to different departments and teams within the organization. The action plan should be clear, actionable, and aligned with the organization’s overall risk management strategy.
An effective action plan will include timelines, milestones, and clear responsibilities for each task. It will also incorporate risk assessment, mitigation strategies, and the implementation of new technologies or processes needed to align with DORA’s requirements. Executing this plan requires coordination across different levels of the organization, ensuring that everyone, from senior management to operational teams, is on the same page. By doing this, an institution can systematically address the identified gaps and work towards achieving full compliance efficiently and effectively.
Strategically Allocate Resources
Once an action plan is in place, the next step is to strategically allocate resources to support its implementation. Allocate an appropriate budget for upgrading technology, bringing in expert assistance, and providing necessary training for the teams responsible for implementing measures to meet DORA compliance standards. This step is vital for ensuring that the institution has the tools, expertise, and knowledge required to achieve compliance.
Resource allocation should be viewed as an investment in the institution’s future resilience. It includes the allocation of financial, human, and technological resources. Upgrading existing technology, acquiring new cybersecurity tools, and investing in training programs for personnel are integral parts of this process. Bringing in external experts to assist with the implementation and offer guidance on best practices can also add significant value. Strategic resource allocation ensures that the institution is well-equipped to handle the complexities of DORA compliance without compromising other operational priorities.
Engage All Stakeholders
DORA compliance requires collaboration across the entire organization. Ensure that senior management, risk teams, and third-party vendors fully understand their roles and the importance of complying with DORA standards. Engaging all stakeholders in the process is crucial for fostering a culture of operational resilience and cybersecurity across the institution.
To achieve this, regular communication and training sessions should be conducted to ensure that everyone is aware of the requirements and their responsibilities. Creating collaborative platforms where stakeholders can share insights, challenges, and solutions can also streamline the compliance process. Engaging third-party vendors is particularly important, as their systems and processes can directly impact the institution’s compliance status. Clearly defining roles, responsibilities, and expectations for each stakeholder group ensures that every aspect of the organization is working towards the common goal of achieving DORA compliance.
Test, Validate, and Report
Regular testing, such as penetration testing and simulated cyberattacks, is essential for identifying and addressing any weaknesses before they become real issues. Test, validate, and report on these activities to demonstrate compliance with DORA. This step involves more than just performing tests; it requires a systematic approach to validate the effectiveness of the measures implemented and documenting the findings.
Conducting regular tests enables institutions to gauge the robustness of their cybersecurity measures and operational resilience. By simulating potential cyber threats and operational disruptions, organizations can proactively identify vulnerabilities and address them promptly. Reporting on these tests not only demonstrates compliance but also provides valuable insights into the institution’s preparedness to handle real-world challenges. Continuous testing and validation ensure that the institution remains resilient and responsive to evolving threats and regulatory requirements.
Maintain Ongoing Monitoring
Compliance with DORA is not a one-time achievement but an ongoing process. Continuously monitor to keep up with evolving threats and any changes in the regulation. Automate parts of this process to enhance efficiency over the long term. This step ensures that the institution remains compliant and resilient in the face of new challenges and requirements.
Ongoing monitoring involves the continuous assessment of the institution’s cybersecurity measures, operational processes, and third-party interactions. Implementing automated monitoring tools can help streamline this process, enabling organizations to detect and respond to threats in real-time. Regular audits and reviews of the compliance status ensure that the institution is always aligned with DORA’s requirements. By maintaining continuous monitoring, financial institutions can build a culture of resilience and preparedness, ensuring long-term compliance and operational stability.
Unlocking Opportunities with DORA
According to the World Economic Forum, businesses that focus on digital resilience and operational efficiency are likely to be more agile, profitable, and forward-thinking in the future. As such, DORA compliance can unlock new horizons, enabling organizations to explore cutting-edge processes and responsibly integrate emerging technologies. By embracing the regulatory requirements, institutions can turn compliance into a strategic advantage, driving innovation and growth.
For instance, one of the world’s largest banks, supporting over 200 million customers across 160 countries, successfully navigated the challenge of complying with global privacy regulations while maintaining operational efficiency. Instead of duplicating infrastructure in multiple countries or outsourcing to costly local data processors, the bank implemented a data security platform with privacy-enhancing technologies. This allowed it to protect sensitive customer data globally, comply with regulations, and unlock new use cases like fine-grained marketing and fraud analytics. This example highlights how DORA compliance can drive innovation and unlock new partnerships and data insights.
Confidently Approaching the DORA Deadline
With the January 2025 deadline quickly approaching, financial institutions across the EU need to prioritize compliance to protect their operations and future growth. Compliance doesn’t have to be overly complex; it can be a strategic move to future-proof operations, boost resilience, and propel growth. By adhering to the outlined steps and taking a proactive stance, institutions can confidently achieve DORA compliance, unlocking a range of opportunities that will position them for long-term success in an increasingly digital and regulated landscape.
DORA compliance, though challenging, offers financial institutions a unique chance to enhance cybersecurity and operational resilience. By performing gap analyses, creating action plans, strategically allocating resources, involving stakeholders, regularly testing measures, and maintaining ongoing monitoring, institutions can meet regulatory requirements while discovering new business opportunities. As financial institutions work towards the January 2025 deadline, adopting DORA as a strategic imperative will ensure they are well-equipped to handle the complexities of the evolving financial ecosystem.
