TO GET THE FULL DORA COMPLIANCE GUIDE FIRST, VISIT US HERE
As the January 2025 deadline approaches, financial institutions across the European Union prepare to increase their financial data security by meeting regulatory compliance standards with the Digital Operational Resilience Act (DORA). But what exactly is DORA, and why does it matter for your organisation? Let’s take a closer look.
What Is DORA?
The Digital Operational Resilience Act is a regulatory framework designed to ensure financial institutions can handle digital threats and disruptions while improving their financial data security.
From cyberattacks to system failures, DORA aims to keep these organisations operating smoothly, even when the unexpected occurs.
Essentially, it pushes financial firms to strengthen their digital infrastructure and resilience against operational challenges.
While DORA builds on existing regulations (such as GDPR), it goes beyond merely protecting personal data. It focuses on ensuring an institution’s
entire IT system remains robust under stress. In other words, DORA helps financial organisations prepare for potential digital disruptions, safeguarding
their operations.
Why Is DORA Important for Financial Services?
With the increase in cyberattacks and digital incidents, operational resilience is more crucial than ever. According to a recent UK government report, around 50% of businesses experienced some form of cybersecurity breach in the past year. Failing to meet DORA’s requirements could lead to more than just regulatory consequences; it could severely impact your reputation and bottom line.
By aligning with DORA, financial institutions will need to implement:
- Standardised processes for risk management
- Improved protocols for incident reporting
- Greater oversight of third-party providers
- Enhanced resilience against IT disruptions
Where a single technical issue can cause widespread chaos, DORA compliance ensures that institutions remain operational and are better prepared to prevent potential crises.
Who Needs to Comply with DORA?
If your organisation falls into one of the following categories, you’ll need to meet DORA compliance regulations:
- Banks and insurance providers
- Investment firms and asset managers
- Payment service providers and electronic money institutions
- Stock exchanges and central securities depositories
- Technology providers (such as cloud services and data centres)
Even non-EU companies that offer services within the EU, including those in the UK or U.S., will be subject to these regulations if they provide services to
EU-based clients.
Countdown to Compliance
DORA was officially adopted in November 2022, with enforcement starting in January 2025. While that might seem like a long way off, financial institutions
must begin preparing now. Ensuring compliance will involve assessing current practices and making the necessary adjustments to meet the new standards well before the deadline.
Consequences of Non-Compliance
Choosing not to comply with DORA carries significant risks, including:
- Increased vulnerability to cyberattacks and system failures
- Regulatory fines and closer scrutiny from authorities
- Loss of customer trust and potential financial damage
Financial institutions can improve their data security with the right data protection tools through Protegrity’s protection platform. Utilizing security methods such as vaultless tokenization, data masking, encryption, and more, organisations can achieve regulatory compliance to meet required standards, such as DORA, now and in the years to come.
In the next post, we’ll walk you through a step-by-step guide to help you prepare for DORA compliance, ensuring your organisation meets the 2025 deadline without the panic!
Check out our data protection platform here to see if Protegrity is right for you or get the full DORA Compliance Guide here.