The Digital Operational Resilience Act (DORA) will enter into force on 17 January 2025.
DORA is a crucial regulatory framework within the EU aimed at enhancing operational resilience and cybersecurity maturity in the financial sector. Further, DORA has the objective of replacing multiple ICT risk management frameworks, with a single unified approach for mitigating all ICT-related incidents in Europe's financial services industry.
DORA applies to a wide range of financial institutions and entities, including credit institutions, investment companies, trade repositories, investment managers, crypto-asset service providers, and crowdfunding service providers.
Notably, there are several cybersecurity controls contained within the Regulation, which fall into five core pillars:
1. ICT Risk Management,
2. ICT Incident Reporting,
3. Digital Operational Resilience Testing,
4. Information and Intelligence Sharing and
5. ICT Third-Party Risk Management.
Foremostly, DORA mandates that covered entities are to implement an appropriate governance and control framework that ensures effective ICT risk management. This obligation requires that management of financial entities should define, implement and oversee the ICT risk management framework, and effectively outlines that the management body of the financial institution or covered entity bears the ‘ultimate’ responsibility of managing ICT risk.
DORA requires that financial entities covered within the Regulation, develop comprehensive ICT risk management frameworks. Notably, the ICT risk management framework must adopt strategies, policies, procedures, ICT protocols and tools that are necessary to effectively protect all information assets and ICT assets within the organisation.
As the deadline for compliance fast approaches the European Commission has adopted several delegated regulations which support DORA, including regulatory technical standards which:
1. specify the harmonisation of conditions enabling the conduct of the oversight activities
2. specify the content and time limits for the initial notification of, and intermediate and final report on, major ICT-related incidents, and the content of the voluntary notification for significant cyber threats
3. specify the criteria for the classification of ICT-related incidents and cyber threats, setting out materiality thresholds and specify the details of reports of major incidents
4. specify the detailed content of the policy regarding contractual arrangements on the use of ICT services supporting critical or important functions provided by ICT third-party service providers
5. specify ICT risk management tools, methods, processes, and policies and the simplified ICT risk management framework
In the coming weeks, White Label Consultancy will be publishing a white paper with even greater analysis into DORA, so, please stay tuned.
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