David Kelleher
Jun 26, 2024
David Kelleher
Jun 26, 2024
As cyber threats become more sophisticated and frequent, the Digital Operational Resilience Act (DORA) represents a critical step forward in fortifying the financial sector against digital disruptions.
DORA, which will be enforced as of January 2025, aims to enhance the digital operational resilience of financial entities within the EU. It mandates comprehensive measures for ICT risk management, incident reporting, resilience testing, and oversight of third-party service providers. The goal is to ensure that financial institutions can withstand, respond to, and recover from all types of ICT-related disruptions.
Compliance with DORA is not merely about avoiding penalties; it is about safeguarding the trust and stability of the financial system. As cyberattacks become more sophisticated, the potential for disruption grows.
ICT is at the heart of modern compliance strategies. Technology gives structure to an organisation’s efforts to meet regulatory requirements, helps to automate tasks but more importantly it helps to improve the overall security posture.
A cornerstone of DORA is the establishment of a robust ICT risk management framework. Financial institutions must implement strategies, policies, and tools to protect all ICT assets, including software, hardware, and infrastructure, especially critical infrastructure, and manage third party and supply chain risks.
This is achieved in several ways, but taking the five pillars upon which DORA is built, ICT is used to bolster your compliance efforts in these areas:
ICT tools enable the automation of risk assessment and management processes, reducing the likelihood of human error and ensuring consistent compliance.
Effective incident reporting and response are important under DORA. Financial entities must have mechanisms for reporting cyber incidents based on their impact on clients, data loss, and service downtime. Rapid response to incidents is essential to minimise damage and comply with regulatory requirements. Technology helps achieve this.
ICT solutions such as Security Information and Event Management (SIEM) systems aggregate and analyse security alerts from across the organisation, providing real-time insights and facilitating rapid response. Moreover, automated incident response platforms can execute predefined actions to mitigate threats immediately upon detection, ensuring compliance.
Managing third-party risks is another critical requirement. Financial institutions must ensure that their contracts with ICT providers comply with DORA's standards. This involves assessing the systemic impact of these providers on the financial system and conducting thorough due diligence on subcontractors.
ICT solutions for third-party risk management allow organisations to continuously monitor the security posture of their vendors. These tools provide insights into potential vulnerabilities within the supply chain and ensure that all partners adhere to the same high standards of cybersecurity, as required by DORA.
Regular testing of ICT systems is mandated to validate the resilience of institutions against cyber threats. DORA requires financial entities to conduct tests at least yearly to identify potential weaknesses and improve the robustness of their ICT systems. Continuous monitoring and control of ICT systems are necessary to ensure their security and functionality.
By conducting thorough and realistic testing, organisations can identify weaknesses and enhance their defensive measures, thereby meeting regulatory expectations and improving their resilience.
Effective backup policies and harmonization of ICT risk management tools are vital for minimising ICT risks. Financial institutions must deploy appropriate strategies and tools to ensure data integrity and availability. ICT solutions such as encryption, tokenisation, and robust access controls ensure that sensitive information is protected both at rest and in transit.
ICT enables continuous monitoring of compliance status through integrated dashboards and reporting tools. These systems provide real-time insights into compliance metrics, helping organisations to quickly identify and address any deviations from regulatory requirements. Continuous monitoring not only ensures ongoing compliance but also supports a culture of accountability and proactive risk management.
Human error remains one of the most significant cybersecurity risks. ICT platforms can deliver comprehensive training programs to educate employees about cybersecurity best practices and emerging threats. Interactive modules, phishing simulations, and ongoing education ensure that staff remain vigilant and informed, thereby enhancing the organisation's overall security posture.
In conclusion, an ICT framework and strategy is indispensable for maintaining operational resilience and ensuring the security and trustworthiness of the financial system in the face of evolving cyber threats.
