In September 2020, the European Commission introduced the Digital Operational Resilience Act (DORA), a transformative proposal designed to bolster the cybersecurity framework of financial institutions within the EU. As part of the broader Digital Finance Package, DORA will impose robust standards for managing risks, reporting incidents, and testing operational resilience. These measures are crucial in an increasingly interconnected and digital financial landscape that is under constant threat from cyberattacks.

With the compliance deadline set for January 2025, financial institutions operating in the EU must urgently assess their readiness. Those who see DORA as an opportunity to transform digitally will enhance both operational resilience and customer trust, while organizations that delay risk serious exposure to cyber threats and non-compliance penalties.

Key Differences Between DORA and GDPR

Though DORA and the General Data Protection Regulation (GDPR) are both EU regulations, their focus areas are distinct. While GDPR ensures the protection of personal data across all sectors, DORA specifically addresses Information and Communications Technology (ICT) risk management within the financial sector.

• GDPR: Focuses on safeguarding individual privacy and enforcing data breach notifications.
• DORA: Targets digital resilience, requiring financial institutions to implement rigorous ICT risk management, resilience testing, and incident reporting processes to maintain the stability of the financial system.

Despite their different objectives, both regulations prescribe penalties for non-compliance, making it crucial for financial entities to understand their scope and requirements.

The 5 Pillars of DORA

DORA’s framework revolves around five key pillars designed to ensure that financial institutions can withstand and recover from operational disruptions:

1. ICT Risk Management:
   Financial institutions are required to develop comprehensive frameworks that continuously monitor, assess, and manage ICT risks. These frameworks should link threats to their potential impact on operations and reputation, enabling organizations to prioritize investments in the most critical areas.
2. ICT Incident Reporting:
   This pillar requires a dual approach:some text
   • Internal Reporting: Institutions must quickly detect and assess incidents to minimize impacts on customers and regulatory bodies.
   • External Reporting: Significant incidents must be promptly reported to regulators, who use this data to shape policies and conduct industry-wide analysis.
3. Digital Operational Resilience Testing:
   Institutions are required to conduct stress tests using various threat scenarios, such as Distributed Denial of Service (DDoS) attacks. These tests ensure that contingency plans are effective, enabling institutions to continuously improve their resilience strategies.
4. ICT Third-Party Risk Management:
   Financial institutions must ensure that third-party ICT providers adhere to the same standards of security and resilience. Strong contractual agreements and continuous monitoring are essential to mitigate third-party risks.
5. Information Sharing:
   DORA encourages collaboration between national agencies and companies by facilitating the exchange of cyber threat intelligence. This fosters a proactive approach to identifying and addressing emerging threats.

Why Forward-Looking Institutions Should Embrace DORA

Organizations that proactively implement DORA’s requirements will gain more than just compliance—they will build long-term operational resilience. By elevating defenses against cyber threats, institutions can increase customer confidence and safeguard operational continuity in a fast-changing financial landscape.

Implementing DORA goes beyond regulatory necessity—it serves as a strategic investment in the future of finance.