FINAL WORD
The financial services industry is facing an increasing number of threats – from cyberattacks and infrastructure failures to physical disruptions . In response , the European Union introduced the Digital Operational Resilience Act , DORA , designed to ensure financial services remain operationally resilient . This regulation not only focuses on traditional financial risk controls but also stresses the importance of strong ICT systems .
Although DORA came into force nearly two years ago , the deadline for full compliance was early this year . By 17th January 2025 , all financial entities within the EU were required to comply – but this is not limited to EU-based organisations .
DORA applies to any financial services organisations operating within or transacting with entities in the EU . This includes firms across investment , retail , commercial banking , insurance and other sectors . Digital and technology providers that support financial services , like SaaS and cloud providers , are also impacted , as too are channel partners .
While DORA has a sizeable cybersecurity focus , its scope is broader , impacting information sharing and digital operational resilience testing too . What is more , the regulation not only affects , financial services providers , but also their suppliers and partners .
Achieving compliance
DORA compliance goes beyond passing audits – it is an ongoing process , requiring financial institutions to continuously build resilience across multiple areas including risk management , incident response and operational stability . Channel partners can add value for financial firms by helping them achieve DORA compliance in numerous ways , including embedding strong , proactive processes across the organisation to effectively respond to an evolving threat landscape .
The starting point around risk management is Know your Services . This requires identifying Important Business Services , IBS that are key to the financial system , such as retail banking or faster payments . For each IBS , the functionality and performance should be defined and measured as part of the service definition , making it easy to identify deviations from the norm when disruptions occur .
Once IBS are identified , it is essential to map and validate their underlying dependencies , both technological and operational . This includes internal services and external third-party providers . DORA requires institutions to maintain a dynamic view of these dependencies , which also undergo continuous change , ensuring gaps are addressed .
Benefits of compliance
Compliance with DORA brings significant benefits beyond regulation . Firstly , it strengthens an organisation ’ s operational resilience . The CrowdStrike outage last year demonstrated how IT supply chain disruptions can impact not just financial services , but industries across the board . Adhering to DORA standards minimises the risk of such disruptions , protecting both internal operations and external partnerships .
One of DORA ’ s key principles is the shared responsibility financial institutions and third-party providers have with expert technology partners .
Secondly , compliance can offer a
competitive advantage . Financial institutions that can demonstrate resilience to regulators and customers will stand out in an increasingly competitive market . Trust and reliability are crucial , particularly in a sector where clients seek secure , stable partners .
Finally , compliance helps build a more robust infrastructure for the future . By continuously refining resilience strategies , channel partners can assist financial institutions in ensuring they are better prepared for tomorrow ’ s risks and supporting long-term stability .
Non-compliance
Non-compliance with DORA could have serious consequences for channel partners . Although no fixed penalties are specified , fines are expected to be proportionate to the severity of the breach , much like GDPR .
Financial institutions may face restrictions , including being barred from working with non-compliant IT providers and resellers . Authorities could also suspend or terminate contracts with those failing to meet DORA standards .
However , financial penalties may not be the most damaging outcome . Mishandling a disruption or security incident could result in significant reputational harm that is often difficult for financial institutions and channel partners to recover from . Non-compliance could even threaten their survival , with repeated violations resulting in the revocation of operating licences .
INTELLIGENT TECH CHANNELS 65