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What is DORA and What are its Mandates?

DORA stands for the Digital Operational Resilience Act. It is a regulation introduced by the European Union to enhance the digital operational resilience of financial entities. DORA aims to ensure that financial institutions can withstand, respond to, and recover from all types of ICT (Information and Communication Technology) disruptions and threats. It is part of the broader EU Digital Finance Strategy, which seeks to modernize the financial sector while ensuring its stability and security.

 

Image #1:  DORA is the Digital Operational Resilience Act (DORA) a European Union (EU) regulation that aims to strengthen the security of information and communication technology (ICT) for the EU’s financial sector.

Why is DORA Important?

DORA is crucial for several reasons, mainly related to the stability, security, and integrity of the financial sector in the EU. Here are the key points highlighting its importance:

1. Enhancing Cybersecurity and Operational Resilience

  • Robust Framework: DORA establishes a comprehensive framework for managing ICT risk across the financial sector, ensuring that all financial entities adhere to high standards of cybersecurity and operational resilience.
  • Threat Mitigation: It requires financial entities to implement robust cybersecurity measures, perform regular testing, and maintain strong recovery and response strategies to mitigate ICT threats.

2. Uniform Standards and Harmonization

  • Consistency Across the EU: DORA aims to create a uniform set of rules and standards for ICT risk management across all EU member states. This harmonization reduces regulatory fragmentation and ensures a consistent level of security and resilience.
  • Level Playing Field: By applying the same standards to all financial entities, DORA helps create a level playing field, promoting fair competition and stability within the financial sector.

3. Risk Management and Governance

  • Risk Management Requirements: Financial entities must have a solid risk management framework in place, including identifying, assessing, and managing ICT risks.
  • Governance: DORA emphasizes the importance of strong governance structures, requiring senior management and boards to be actively involved in ICT risk management and resilience strategies.

4. Incident Reporting and Management

  • Mandatory Reporting: Financial entities must report significant ICT-related incidents to their national competent authorities. This helps regulators monitor and respond to systemic risks more effectively.
  • Timely Responses: DORA ensures that financial entities have processes in place for timely incident detection, management, and communication, minimizing the impact of disruptions.

5. Third-Party Risk Management

  • Oversight of Third-Party Providers: DORA mandates that financial entities manage and monitor the risks associated with their third-party ICT service providers. This includes conducting due diligence, establishing contractual safeguards, and maintaining ongoing oversight.
  • Concentration Risks: It addresses concentration risks by ensuring that dependencies on critical third-party providers are managed and that contingency plans are in place.

6. Resilience Testing and Monitoring

  • Regular Testing: Financial entities are required to conduct regular resilience testing, including threat-led penetration testing, to ensure their ICT systems can withstand and recover from attacks.
  • Continuous Monitoring: Ongoing monitoring and evaluation of ICT systems and controls are mandated to ensure continuous improvement and adaptation to emerging threats.

7. Consumer Protection and Trust

  • Protecting Consumers: By ensuring that financial institutions are resilient to ICT disruptions, DORA helps protect consumers’ data, assets, and access to financial services.
  • Building Trust: Enhanced operational resilience builds trust and confidence in the financial sector, encouraging more robust participation in digital financial services.

DORA is a significant regulatory framework designed to enhance the digital operational resilience of financial entities in the EU. By establishing uniform standards for cybersecurity, risk management, incident reporting, and third-party oversight, DORA aims to ensure that the financial sector can withstand and recover from ICT disruptions and threats. Its implementation is crucial for maintaining the stability, security, and integrity of the EU financial system, protecting consumers, and fostering trust in digital financial services.

Image #2: DORA has 5 main pillars of guidance. Source: European Commission provided by Ralf Menegatti, DAQS consulting.

Summary:
EU’s DORA is an important regulation and guidance that now regulates digital resilience in the EU region.   Risk and governance are important part of the act  YouAttest addresses the concerns on identity rights and permissions and is an important part of any enterprise attesting to the spirit and letter of DORA.

Please contact us to help you meet compliance to DORA and other guidelines that have identity attestation requirements.

 Contact us to learn  how YouAttest can automate you identity attestation process for all your resources.

 

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