As a head of compliance in the financial sector, you’re acutely aware that rapid digitisation and evolving cyber threats call for unwavering vigilance. The Digital Operational Resilience Act (DORA), in operation since January 2023 and applicable from January 2025, serves as your guiding beacon amidst the sea of IT and cybersecurity risk management.
DORA and ICT Risk Management
At the heart of DORA regulation is the need for effective governance and robust organisational structures to manage Information and Communication Technology (ICT) risks. The onus is on you and your leadership team to craft an organisational architecture capable of managing ICT risks proactively, shifting gears from reactive firefighting to anticipatory risk management.
DORA mandates that all but the smallest financial entities design and implement a robust ICT risk management framework. This call to action necessitates a nuanced understanding of your digital environment and the evolving threat landscape. As your roadmap for navigating ICT risks, this framework should ensure an independent, three-tiered approach to ICT risk management, control, and internal auditing, adhering to the three lines of defence or an alternative internal risk management and control model.
ICT-related incident management is a cornerstone of DORA regulation. As the head of compliance, you must foster the capabilities necessary to oversee, manage, and track such incidents. Notably, incidents that meet DORA’s stringent criteria must be reported to the relevant authorities based on aspects like geographic reach, the criticality of services affected, and incident duration.
DORA regulation ushers in a new era of digital operational resilience testing. In the face of increasingly complex cyber threats, regular testing of your ICT systems is non-negotiable. An effective testing programme should encompass a range of checks, including open-source analyses, vulnerability assessments, gap analyses, and network security assessments. Critically, DORA dictates annual testing for vital ICT systems, with some financial entities required to conduct advanced threat-led penetration testing triennially.
DORA Regulation and Third-party Risk
The rise of third-party ICT service providers has not escaped DORA’s attention. As a head of compliance, you are expected to devise a strategic approach to manage associated ICT risks, with periodic evaluations and meticulous record-keeping of all contract agreements to ensure transparency and traceability. Ypu can find put more about DORA requirements and third-party risk management in our DORA 101 Guide.
DORA and Digital Resilience
Finally, DORA encourages collaborative information sharing among financial entities. Within the boundaries of trusted communities and compliant with relevant legislation, the sharing of cyber threat intelligence is promoted, contributing to the collective digital resilience of the financial sector.
In essence, DORA regulation embodies a significant leap in how the financial sector contends with ICT risks. As a head of compliance, it is your compass to navigate the turbulent cyber threat landscape, steering your entity towards a proactive, structured, and collaborative risk management approach. As we delve deeper into the digital age, this commitment to resilience will be paramount in safeguarding financial services’ integrity, security, and continuity, ultimately protecting consumers and preserving market stability. The call to action is clear: it’s time to step up our game in the face of digital threats.
Get in touch with RiskXchange to find out how we can help you with DORA regulation compliance.