14/03/2024 kde

DORA Compliance: Practical tips and common pitfalls to avoid

The Digital Operational Resilience Act (DORA) is on the horizon for financial institutions across the EU. While new regulations can feel disruptive, achieving DORA compliance can be a smooth journey with the right preparation. This blog post will guide you through the practicalities of DORA compliance, from common challenges to resource allocation strategies.

The risks of skipping DORA:

DORA compliance isn’t just about avoiding financial penalties, which can be significant. Institutions that don’t adhere to the regulations could face fines of up to 1% of their daily global turnover, accumulating each day until compliance is achieved. In extreme cases, non-compliance could even lead to a temporary shutdown.

Beyond the financial risks, non-compliance can have a broader impact. It can increase your vulnerability to cyberattacks and system failures, disrupt services, and erode customer trust. It can also strain relationships with partners, investors, and stakeholders who rely on your operational reliability and security.

Common challenges & practical solutions

Here’s a look at some common challenges you might encounter during DORA compliance and how to address them:

  • Mapping critical services: DORA requires a clear understanding of your most important financial services and their underlying IT systems. Conduct a thorough IT asset mapping exercise to identify and prioritize critical services, then map their dependencies.
  • Building your ICT risk framework: DORA mandates a strong framework for managing IT security risks (ICT risks). Leverage industry best practices to build a framework tailored to your needs. Consider seeking guidance from DORA compliance consultants if needed.
  • Taming third-party risk: DORA emphasizes managing risks associated with third-party vendors who provide critical IT services. Develop a comprehensive third-party risk management program that includes vendor selection criteria, risk assessments, contractual security obligations, and ongoing monitoring.

Dora - 3 common chalanges

Optimizing resources for DORA compliance

Financial institutions can achieve DORA compliance without breaking the bank. Here are some strategies for efficient resource allocation:

  • Prioritization: Focus on the most critical services and systems first. Conduct a risk assessment to identify areas that require immediate attention and allocate resources accordingly.
  • Leverage existing resources: Review existing resources and processes to see if they can be adapted to meet DORA requirements.
  • Phased implementation: Break down DORA compliance into achievable phases. This allows you to focus resources on the current phase while planning for the next.
  • Cost-benefit analysis: For any new solutions or tools, conduct a cost-benefit analysis to ensure they provide a strong return on investment. Consider open-source solutions or collaborating with other institutions for cost-effective options.

By following these steps and best practices, your financial institution can achieve and maintain a strong DORA compliance posture.

Concluding, DORA compliance is an ongoing process, but with careful planning and resource allocation, it can be achieved smoothly. Remember, there are resources available to help you on this journey. Don’t hesitate to seek guidance from professionals to ensure your financial institution is well-prepared for the future.