Petter Glenstrup, Director, Sales Engineering at Arctic Wolf and AJ Thompson, COO at Northdoor plc
The Digital Operational Resilience Act (DORA) will soon establish a universal framework for managing, reporting and outsourcing IT risk for the European Union (EU)’s financial sector. Looking to mitigate a recent rise in cyber attacks on the industry, the legislation will require organisations to withstand, respond to and recover from related disruption – ensuring they remain operational in the event of an attack.
Organisations and their third-party providers, including those that provide digital and IT solutions, will be expected to comply with the regulation by January 2025. It’s therefore crucial IT service providers and the wider channel understand how the legislation will affect them now, and are prepared for its introduction. While it can be difficult to know where to start, below are five simple steps your organisation can take to ensure it meets the requirements for cyber resiliency outlined in the legislation. This will ensure your business, and the wider channel, remains DORA-compliant in the months and years ahead.
1. Determine whether your organisation will need to comply
DORA applies to all financial institutions in the EU, including banks, insurance companies and investment firms – regardless of their size or revenue. However, it also extends to third party suppliers throughout an organisation’s supply chain. This means even the businesses which supply financial services organisations with IT systems and services – whether that’s cloud providers, data centres or even AI vendors – must also ensure they comply with the requirements.
It’s therefore crucial every business across the supply chain, from resellers to partners, is taken into account when preparing for the legislation. For channel organisations, in particular, this means it’s important to ensure they’re partnering with and selling to DORA compliant organisations only. This is because failure to comply could lead to heavy financial penalties, meaning it’s vital organisations across the board meet its requirements.
2. Identify gaps in your identification, reporting and testing procedures
DORA will require organisations to prove that they can withstand IT-related disruption, including cyber attacks. This means it’s vital leaders take the time to understand where the existing gaps lie in their organisation’s line of defence – as well as how they identify, report and recover from an incident. Conducting a risk assessment of your organisation and its wider supply chain can allow you to identify the areas of vulnerability in your network and develop a plan of action to address these. This should include evaluating the key areas DORA will assess, including incident reporting, scenario testing and risk governance, and should also extend to third party providers.
3. Develop a plan of action to address these
Once you have conducted a risk assessment of your organisation, you can then start developing a plan of action for compliance. This should meet the requirements outlined in Article 6(8) of the DORA legislation, and should explain how an IT risk management programme supports your organisation’s business objectives and wider strategy. It should also establish a risk tolerance level, explain your organisation’s existing IT infrastructure, outline the different mechanisms in place to detect an incident and include a comprehensive strategy for communicating within your organisation and to the wider public in the event of an attack.
4. Conduct regular employee training
Alongside establishing a risk management programme, DORA also mandates security awareness and digital operational resilience training for board members, senior management figures and employees. This should be an important focus given an estimated 60% of data breaches are caused by insider threats – whether that’s deliberate or accidental. It’s therefore crucial every member of your organisation is educated on IT risk and how to spot the key signs of an attack via regular workplace cybersecurity training. This should also cover what to do in the event of an attack – including reporting an incident to your IT teams.
5. Regularly review and update your plan
Once the legislation has been implemented beyond 2025, each eligible organisation will have their risk management plan reviewed either, at least once a year, or periodically for smaller businesses, as well as upon the occurrence of an IT-related incident. It’s therefore important these plans are regularly reviewed internally to ensure they still comply and are continuously improved and updated in line with the legislation’s requirements where necessary. This will not only ensure your organisation remains compliant with the new regulations, but that your wider operational resilience strategy stays effective over time.
By understanding and implementing the above steps, financial service organisations and their suppliers can ensure they’re prepared ahead of the implementation of DORA in early 2025. While a year might feel like a long time to ensure compliance, organisations who don’t start preparing now will find it difficult to get everything in order in time. The time to act is now – before it’s too late.
