Digital Operational Resilience Act - DORA
The Digital Operational Resilience Act (DORA) is an EU regulation enhancing financial institutions' ability to manage and recover from ICT-related disruptions. It mandates risk management, resilience testing, incident reporting, and third-party oversight.
Digital Operational Resilience Act (DORA) refers to a legislative framework established by the European Union aimed at strengthening the digital operational resilience of financial entities. Enacted to ensure that financial institutions can withstand and recover from all types of ICT-related disruptions and threats, DORA sets uniform requirements for network and information systems, third-party risk management, and incident reporting.
Key Components of DORA
-
ICT Risk Management: Financial institutions are required to implement robust ICT (Information and Communication Technology) risk management frameworks. This includes identifying, assessing, and mitigating risks associated with digital operations.
-
Operational Resilience Testing: Regular testing of digital systems is mandated to ensure their resilience. This involves vulnerability assessments, penetration testing, and scenario-based testing to prepare for potential cyber incidents.
-
Incident Reporting: DORA introduces stringent requirements for reporting ICT-related incidents. Financial entities must promptly notify competent authorities of significant disruptions or threats, ensuring a swift and coordinated response.
-
Third-Party Risk Management: The act imposes strict oversight on third-party ICT service providers. Financial institutions must monitor and manage risks arising from outsourced services, ensuring these providers adhere to DORA’s standards.
-
Information Sharing: DORA encourages information sharing between financial entities and regulatory bodies to enhance collective understanding and preparedness for cyber threats.
Importance of DORA
DORA is crucial for enhancing the cybersecurity and operational resilience of the EU’s financial sector. By standardizing requirements across member states, it aims to create a secure and resilient financial ecosystem capable of withstanding cyber threats and technological failures. This not only protects financial institutions but also safeguards the broader economy and consumers’ interests.
In summary, the Digital Operational Resilience Act (DORA) is a comprehensive EU regulation designed to bolster the digital robustness of financial entities, ensuring they can effectively manage and recover from ICT-related risks.