The Digital Operational Resilience Act (DORA) is an EU regulation effective from January 17, 2025, aimed at enhancing the digital resilience of financial entities. It mandates comprehensive ICT risk management, incident reporting, and third-party oversight to ensure financial institutions can withstand, respond to, and recover from ICT-related disruptions.
Businesses required to comply with DORA include:
DORA's primary function is to ensure that businesses within its remit are more resilient to operational disruption related to digital services. This is necessitated by the fact that financial entities are increasingly vulnerable to outages and downtime associated with the aforementioned third-party ICT providers.
DORA is an EU-wide regulatory framework that standardises the way that organisations in this sector assess and defend against digital risks. The increased focus on operational resilience is intended to stabilise the entire market as well as individual entities.
So, if a bank outsources a service to a third-party cloud vendor, DORA requires it to analyse the risks involved and put contingencies in place to minimise them. Likewise, any third-party ICT provider must take continuity seriously and prove itself compliant to serve companies in this niche.
Financial institutions and ICT providers can achieve DORA compliance by first determining if the regulation applies to them, analysing gaps in their ICT risk management, updating internal policies, reviewing third-party providers, conducting regular operational resilience testing, implementing reporting mechanisms, and sharing threat intelligence with peers.
Here’s a clear, step by step guide to help your organisation align with DORA requirements and strengthen operational resilience.
Step 1: Determine if DORA Compliance Applies to Your Organisation
DORA compliance applies to EU financial entities and ICT providers serving these organisations.
The first step is to determine whether DORA applies to your organisation. If your business falls under this scope, compliance must be integrated into your risk management processes. It is important to remember that DORA can be interpreted differently across EU member states, so consulting local legal experts at this stage is recommended to avoid potential gaps.
Step 2: Analyse Compliance Gaps in ICT Risk Management
DORA requires organisations to identify gaps in ICT risk management to ensure operational resilience.
Once you have established that compliance is required, analyse your existing ICT risk management practices and compare them against the regulation’s requirements. This process helps pinpoint non-compliance issues, such as incident response procedures that do not meet DORA standards or high-risk third-party dependencies. Prioritising the most critical dependencies first allows your organisation to focus on the areas that pose the greatest threat to operational continuity.
Step 3: Develop or Update Policies for DORA Compliance
DORA compliance depends on having up-to-date internal policies for ICT governance and incident response.
After identifying gaps, create or update policies covering areas such as detecting, mitigating, and reporting ICT-related incidents. Assign responsibility for these policies to specific team members so that compliance is maintained consistently and accountability is clear in the event of disruption.
Step 4: Review Third-Party ICT Providers for Compliance
DORA requires that all third-party ICT providers supporting EU financial entities meet regulatory standards.
Organisations should assess the compliance of every supplier, verify adherence to DORA requirements, and incorporate DORA-specific clauses into contracts covering risk management, reporting obligations, and operational continuity. Due diligence should be ongoing, and the same attention to detail should be applied when procuring new ICT services.
Step 5: Conduct Regular Testing to Ensure Operational Resilience
DORA mandates regular testing of digital systems and dependencies to demonstrate operational resilience.
Controlled disaster recovery simulations and risk assessments of third-party services must be carried out. Testing should cover both internal systems and external dependencies, and methodologies should be updated whenever changes occur. Thorough documentation is crucial to refine policies and provide clear evidence of compliance.
Step 6: Implement Reporting Mechanisms for DORA
DORA compliance requires clear and effective reporting mechanisms.
Organisations must understand which incidents need to be reported, establish documented processes for internal and external reporting, and ensure that team members are trained to use these mechanisms properly. This approach maintains transparency, accountability, and prevents delays in notifying regulators when incidents occur.
Step 7: Share Information with Contemporaries
DORA encourages organisations to share information about emerging threats to improve financial market stability.
By integrating processes that monitor shared threat intelligence, your organisation can adapt its risk management strategies and contribute to wider operational resilience efforts in the EU and beyond.
The way you approach DORA compliance must be adapted to your organisation's particular needs. However, this overview gives a sense of the steps involved and why financial entities and ICT providers cannot ignore this regulation. If you have EU operations, serve customers or clients in this group of nations, or intend to do so in the near future, there is no alternative but to prioritise compliance efforts.
For further guidance on achieving DORA compliance, contact Escode to explore how our software escrow solutions can help manage regulatory requirements and strengthen ICT resilience.
