The Digital Operational Resilience Act (DORA) is an EU regulation aimed at strengthening the digital operational resilience of financial entities within the European Union.

It requires these entities to implement robust measures for managing information and communication technology (ICT) risks, including incident reporting, testing, and third-party risk management. DORA aims to ensure that the financial sector can withstand severe digital disruptions.

Here's a more detailed explanation:

Focus

DORA focuses on the digital operational resilience of financial entities, ensuring they can maintain critical functions during and after ICT-related incidents.

Scope

It applies to a wide range of financial institutions, including credit institutions, payment institutions, investment firms, and insurance companies, as well as their critical ICT third-party providers.

Key Areas

DORA addresses five key areas:

ICT Risk Management: Establishing a comprehensive framework for identifying, assessing, and mitigating ICT-related risks.

ICT Incident Reporting: Implementing procedures for classifying, reporting, and managing ICT-related incidents.

Digital Operational Resilience Testing: Conducting regular testing of ICT systems and tools to identify vulnerabilities and ensure operational continuity.

Management of ICT Third-Party Risk: Managing risks associated with using third-party ICT service providers.

Information Sharing: Encouraging information and intelligence sharing among financial entities to enhance collective resilience.

Implementation:

DORA entered into force on January 16, 2023, with application as of January 17, 2025.

Purpose

The regulation aims to harmonize digital operational resilience requirements across the EU financial sector, ensuring a consistent approach to managing ICT risks and promoting financial stability.

We typically propose a four-phase approach to achieve DORA readiness:

Phase 1: DORA Gap Assessment

Analyze current ICT governance, policies, and controls.

Evaluate the organization against DORA Articles (incl. ICT Risk Management, Incident Handling, Third-Party Risk).

Identify compliance gaps across DORA’s five pillars.

Deliver a prioritized remediation roadmap.

Phase 2: Policy Design and Control Framework Alignment

Review and update key documents:

ICT Risk Management Policy

ICT Security Framework

Incident Response Plan

Third-Party Risk Management Procedures

Digital Resilience Testing Plan

Align with EBA, EIOPA, and ESMA guidance.

Phase 3: Incident Response & Reporting Readiness

Design incident classification taxonomy and response workflows.

Prepare regulatory notification templates (for NCAs/ESAs).

Conduct tabletop exercises with key teams (e.g., Security, Legal, Risk).

Phase 4: Resilience Testing and Board Reporting

Support advanced testing (incl. penetration tests, scenario testing).

Prepare executive summary reports and dashboards for C-level and board use.

Map regulatory disclosures and reporting requirements.