06/03/2024 kde

DORA: The game-changing regulation You can’t ignore

Dora_regulation

Welcome to our blog series on the Digital Operational Resilience Act (DORA). This is a new regulation applying to the financial industry that comes to life shortly. In this series, we’ll break down DORA’s complexities, providing you with the essential knowledge and giving you actionable insights to prepare your firm.

Why DORA Matters

DORA is a fundamental shift in how financial companies manage online security and operations. To stay ahead of the curve, understanding DORA’s impact is essential – and yes, it will require investment.

What is DORA?

DORA establishes a comprehensive framework for digital risk management.  This includes how companies handle cybersecurity threats, manage risks from third-party service providers, report digital incidents, and rigorously test their systems. DORA aims to ensure the financial sector’s digital backbone remains strong and secure.

Real examples showing DORA’s importance

Remember when HSBC faced a cyber-attack in 2020, interrupting online services for many customers? This issue cost the bank money and damaged its reputation. Similarly, in 2018, TSB Bank had a major problem when moving customer data to a new system, locking out nearly two million customers and causing a lot of trouble. These stories show the real risks in the digital world of finance. They highlight why DORA’s strict rules are important, helping protect financial companies from such problems and making the financial world safer and more reliable for everyone.

Implementation Timeline: Get Ready by 2025

Adopted at the end of 2022 as part of the EU’s Digital Finance Package, the Digital Operational Resilience Act (DORA) takes a phased approach for financial institutions. The first phase becomes fully applicable by January 2025. By then, your organization needs to meet its rigorous requirements: robust ICT risk management, diligent incident reporting, thorough resilience testing, and effective management of third-party ICT risks.  This lead-up to 2025 is your firm’s critical window to adapt and ensure a smooth transition when DORA fully takes effect.

Our Next Post

In our next blog post, we’ll take a deep dive into DORA’s specific requirements and guide you through effective preparation strategies.