Digital Operational Resilience Act (DORA): How to Navigate Compliance in the Financial Sector and ICT?

On January 19, 2024, the three European Supervisory Authorities (EBA, EIOPA, and ESMA) released the first set of final draft technical standards under DORA to improve the digital operational resilience of the EU financial sector by strengthening ICT and third-party data risk management.

Although DORA goes into full effect on January 17, 2025, if you’re responsible for developing and implementing compliance, data security, and protection procedures in the financial sector and ICT, this article is for you.

Here, you’ll learn what exactly DORA is, why it matters, and how to stay compliant. Let’s explore the details.

DORA 101: Understand What the Regulatory Framework is All About

Understanding DORA and adhering to it isn’t just a matter of regulatory compliance; it’s more about safeguarding the integrity and stability of your business.

Before DORA, the EU regulations mainly focused on ensuring sufficient capital for operational risks. ICT and security risk guidelines varied for financial entities, leading to a mix of challenging regulations.

For instance, a bank that operates in France may follow different ICT and security risk guidelines compared to one operating in Germany. This creates challenges for cooperation between international branches because there are no unified compliance standards.

DORA will change this.

The main reason behind the regulation is that the financial sector increasingly depends on technology and services offered by tech vendors. This makes financial entities vulnerable to cyber-attacks or incidents.

Picture this scenario: Your bank relies on a cloud service provider to host its customer data. If the provider experiences a breach and exposes sensitive financial information, your organization could face the daunting prospect of restoring trust and recuperating potential revenue losses.

Even without a data breach, third-party service providers might not uphold your business's data-handling standards or security protocols despite having contractual agreements and assurances in place.

What is DORA?

DORA is a regulatory framework proposed by the European Commission to ensure the financial sector's and ICT's operational resilience. It aims to address the increasing digitalization of financial services and the potential risks associated with cyber threats and ICT disruptions.

The regulatory framework establishes a comprehensive set of rules and requirements to improve the operational resilience of financial institutions and infrastructure providers.

Financial institutions and infrastructure providers include:

  • Credit institutions
  • Payment institutions
  • E-money institutions
  • Investment firms
  • Crypto asset service providers
  • Central securities depositories
  • Central counterparties
  • Trading venues
  • Trade repositories
  • Management companies
  • Insurance undertakings and intermediaries
  • Crowdfunding service providers
  • Securitization repositories.
DORA also applies to third-party ICT service providers such as cloud platforms or data analytics services. If you represent this type of business, you have to adjust requirements for the security of network and information systems, too.

The new regulation encompasses various measures to prevent, detect, and mitigate ICT-related incidents. The key idea is to ensure the continuity of critical functions in the financial sector.

Let’s explore the main ideas behind DORA.

Main Objectives of the Digital Operational Resilience Act

DORA’s key ideas aim at strengthening the resilience of the financial sector and ICT by:

  • Promoting proactive risk management and incident response capabilities to safeguard critical functions
  • Establishing a clear governance program and oversight to address potential ICT-related disruptions and cyber threats
  • Fostering collaboration and information sharing among relevant stakeholders to enhance overall operational resilience
  • Ensuring compliance with regulatory standards to mitigate systemic risks and protect the stability of the financial sector and ICT infrastructure
DORA’s objectives seek to improve the level of operational resilience within the financial sector and ICT to improve consumer trust and safeguard the stability of the overall digital ecosystem.

This is How DORA Impacts the Financial Sector

The implementation of DORA has initiated significant changes in compliance requirements for financial institutions. These modifications fundamentally alter how your business interacts and responds to regulatory demands.

Changes in Compliance Requirements

DORA brings stricter compliance standards for financial institutions, prompting a reassessment of internal processes, risk management, transparency, and data security.

The regulation includes:

  • Policies, procedures, protocols, and tools your organization needs to protect data
  • Guidance of how to classify, report, and respond to threats (especially reporting major incidents)
  • Guidelines on more regular testing like vulnerability scans, network assessments, and penetration assessments
It also requires more robust reporting, real-time data monitoring, and advanced analytics integration. Your business, among other financial institutions, must align with evolving regulations to mitigate risks and maintain financial integrity.

What Opportunities Does DORA Regulation Bring for Your Business?

The implementation of DORA might feel overwhelming at times. We got you. All in all, a big part of your role is planning and executing the strategy so your organization adheres to this new regulation.

However, changes in regulations bring innovation and growth opportunities, too.

For instance, using DORA can help your business standardize practices and technologies, leading to a robust infrastructure, enhanced cybersecurity, and resilient systems. This can give you a competitive edge in the financial and ICT industries.

Plus, complying with DORA demonstrates your commitment to operational resilience and security, which can build trust among customers and stakeholders.

Your organization also should move towards adoption of a zero trust data approach that ensures that all data sources and storage locations are treated as potentially compromised, with continuous verification and validation of data access and transactions. This data management strategy aligns with DORA’s requirements and secures data integrity and confidentiality across all ICT systems.

Proactively preparing for DORA can reassure clients that their data and assets are protected against cyber threats and operational disruptions. And even in case of a breach, compliance with DORA ensures that the customer data stays safe.

This is How DORA Impacts ICT

If you stand on the service providers' side, implementing DORA also significantly impacts your organization.

Integrating DORA regulations in ICT infrastructure and reinforcing cybersecurity and data protection measures remain important in ensuring compliance and fostering operational resilience.

Integration of DORA in ICT Infrastructure

Integrating DORA into the ICT infrastructure requires a thorough approach to adjust and strengthen current systems. This includes:
  • Strong risk management frameworks
  • Transparent incident reporting processes
  • Defining clear operational duties

How Can You Start Preparing for DORA?

Cybersecurity is crucial for your business to protect sensitive data, prevent financial fraud, maintain customer trust, and ensure the integrity of critical systems and operations.

However, the traditional data protection measures fall short of providing this security and ensuring compliance with DORA.

Gary LaFever, Co-CEO & General Counsel at Anonos, noticed that:
“Financial services entities and ICT providers must move beyond traditional data protection measures to implement proactive techniques to ensure that data remains secure and private even when accessed during a breach, thereby maintaining operational resilience.

This is because traditional security measures like encryption, perimeter access controls, Data Loss Prevention (DLP), and Identity and Access Management (IAM) are not architected to ensure data resiliency upon breach.”
However, there is also some positive news to share. Your business can establish a framework for DORA compliance. Using technology will allow you to implement protective measures in line with this regulation while also enabling:

  • Faster time to data for your teams
  • Preserving data accuracy for analytics
  • Automating governance processes
  • Assessment of the data protection levels
Let’s see the details.

How Do You Use Data Protection Technology to Become Compliant with DORA?

As we already mentioned, traditional privacy-enhancing technologies separately can’t make your organization compliant. But thanks to technological advancement, your organization can go with a way more secure, altered version of sensitive data. Enter Anonos Variant Twins.
No One Technique Can Support All Use Cases
Variant Twins technology transforms cybersecurity by encrypting data to meet DORA's strict standards while preserving its utility for all supply chain members.

This approach also ensures that data utility is not compromised, allowing the data to be used across all supply chain entities. Variant Twins enable:

  • Lawful Data Utilization for Analytics and AI: Anonos Data Embassy generates non-identifiable personalized data called Variant Twins, enabling compliant Analytics, Machine Learning, and other data processing activities. This capability is particularly important under DORA, which emphasizes securing financial data
  • Enhanced Data Protection: This technology transforms source data into Variant Twins that are resistant to unauthorized re-identification. This means the data remains secure and private even during a data breach, a key requirement under DORA
  • Compliance with Cross-border Data Transfer and Protection Regulations: Variant Twins ensure compliance with stringent data protection regulations like GDPR, Chinese PIPL and international data transfer requirements. This is crucial for global enterprises operating across borders, ensuring they meet the legal requirements of various jurisdictions
  • Unique Value Proposition: Traditional data protection tools often require a trade-off between data security and utility. Variant Twins overcomes this challenge by providing robust data protection without compromising the utility of the data. This unique value proposition sets Anonos technology apart from other data protection solution providers
  • Business-to-Business Data Sharing: DORA establishes a framework for promoting voluntary business-to-business data sharing in the financial sector to improve cyber resilience and raise awareness of cyber threats in the financial industry. Variant Twins uniquely leverages the capabilities of GDPR-compliant pseudonymization to enable data sharing without exacerbating resiliency risk in compliance with other EU data-related laws, such as the GDPR and the DGA.

DORA Regulation: Start Preparing Today and Enter 2025 with Peace of Mind

The introduction of DORA definitely brings big changes to finance and tech in the EU. Get ready for DORA now to ensure your organization is prepared.

Anonos will help rethink your data protection strategy and guide you through the changing regulatory landscape, ensuring your organization meets compliance and thrives in the new era.

Reach out to us and share your unique use case to implement the best technology so you have peace of mind in 2025.