The Digital Operational Resilience Act (DORA), is a regulatory framework established by the European Union to fortify the financial sector against information and communication technology (ICT) threats.
Recognizing the financial industry’s critical infrastructure role, DORA is designed to help organizations manage and protect against ICT-related risks and operational disruptions. It sets rules for managing risk, reporting incidents and testing resilience to ensure that financial institutions within the EU can withstand, respond to and recover from ICT-related disruptions.
What is DORA compliance?
DORA regulations require organizations to:
- Conduct recurring security and resilience tests and fully address identified vulnerabilities.
- Assess, document and establish steps to mitigate cyberthreats.
- Employ solutions and controls for areas such as as identity and access management (IAM) and threat detection and response.
- Establish approaches for monitoring, managing, logging, classifying and reporting ICT incidents.
- Build a plan for rebuilding after a serious attack.
What are the challenges of DORA compliance?
Financial institutions often grapple with the complexity of their ICT systems, which require thorough assessment and fortification against emerging threats.
DORA requires coordination between different departments and organizations, oversight of third-party risks and detailed reporting and documentation. These activities can be resource-intensive and demand substantial time, cost and effort.
Incident management presents another significant challenge. Institutions often struggle to establish robust processes for efficiently handling and reporting ICT-related incidents, necessitating real-time monitoring and quick response capabilities.
DORA and AI
Integrating AI into their operations can help financial institutions not only comply with DORA but also strengthen their overall operational resilience in the following ways:
- Risk management and monitoring: AI algorithms can help in real-time detection of anomalies, continuous monitoring of systems, predictive analytics for potential ICT failures and automated responses to mitigate risks.
- Incident reporting and response: AI can play a role in automating incident detection, reporting and analysis, ensuring that incidents are flagged and escalated promptly.
- Operational resilience testing: AI can be used to simulate various threat scenarios, perform stress testing and evaluate the resilience of different systems under simulated conditions.
- Compliance and regulatory reporting: AI can streamline and automate data collection, analysis and submission processes.
- Data management and governance: Financial institutions handle vast amounts of data. AI can ensure that data is stored, processed and transmitted in a manner that complies with DORA’s data protection requirements.
What are the benefits of DORA compliance?
Complying with DORA can help financial institutions develop robust systems capable of maintaining operations during disruptions. This enhances business continuity, protects sensitive data and mitigates the risk of costly cyberattacks.
Compliance with DORA also ensures that financial institutions meet EU regulatory requirements, helping them avoid fines and legal complications and improve coordination among financial institutions. It also demonstrates a commitment to high security and operational standards that enhance customer trust.
DORA mandates robust privileged access management (PAM) controls because threat actors frequently target privileged accounts. However, because any identity—whether it belongs to workforce users, IT admins, developers, or non-human entities—can become privileged based on its access level, security teams. Organizations must consider a wide scope of identities when interpreting regulatory mandates.
A comprehensive identity security approach focused on protecting any identity with access to sensitive resources can significantly aid in DORA compliance. By restricting access to exploitable identities, streamlining audits through efficient demonstration of security controls and maintaining detailed logs of user activities, organizations can ensure accountability and regulatory adherence.
DORA also emphasizes the importance of managing third-party risks. PAM controls enhance security by improving visibility and control over privileged accounts, isolating and monitoring sessions and auditing user activities, thereby helping organizations meet DORA’s stringent requirements.
Here are some other best practices for financial institutions:
- ICT risk management: Develop and document comprehensive information security policies, establish access controls and implement strong authentication mechanisms.
- Incident management: Create processes for handling and reporting ICT incidents, including anomaly detection and centralized reporting.
- Resilience testing: Conduct regular testing and simulation exercises to assess and improve the posture of ICT systems.
- Governance: Establish clear roles and responsibilities to oversee DORA compliance efforts.
- Information sharing: Foster secure sharing of threat data and intelligence among other financial entities, authorities and international partners.
- Continuous monitoring and improvement: Utilize tools for continuous monitoring, session auditing and integration with security information and event management (SIEM) systems.
Learn more about DORA compliance:
- Addressing Zero Trust for Government: The Role Of Identity Security
- DORA Compliance: An Identity Security Guidebook
