DORA Regulation & Compliance: What It Means for Your Business

Technology runs our world—until it doesn’t. With apps, websites, and IT systems woven into nearly every aspect of life, it’s easy to forget how much we rely on them. But when things go wrong, the impact can be immediate and severe.

In July 2024, a glitch in a widespread security software update led to thousands of canceled flights, hospitals losing access to their patient records, and extensive disruptions across many other industries.

Our growing reliance on technology is precisely why the Digital Operational Resilience Act (DORA) regulations are critical.

What Is the Digital Operational Resilience Act (DORA)?

The Digital Operational Resilience Act (DORA) is a landmark regulation designed to strengthen the European Union’s financial sector against technology-related disruptions. Recognizing the industry’s deep reliance on third-party technology providers, the European Parliament and Council created DORA to ensure that banks, insurers, investment firms, and other financial entities can withstand, respond to, and recover from ICT-related incidents—from cyberattacks to major system outages.

Now fully in force as of January 17, 2025, DORA establishes a harmonized framework for managing information and communications technology (ICT) risks across the EU. It requires financial institutions to maintain robust ICT risk management systems, report significant incidents, and regularly test their operational resilience.

The regulation also introduces direct oversight of critical third-party ICT service providers, such as cloud computing and data analytics vendors, to reduce systemic risk and improve cross-sector accountability. In practice, this means financial organizations must demonstrate—not just declare—their ability to continue critical operations during disruptions.

By setting consistent standards for resilience, incident reporting, and third-party risk management, DORA ensures the EU’s financial ecosystem remains stable, secure, and transparent in the face of evolving digital threats.

Who Does DORA Apply To?

If you think DORA affects only big banks in Europe, think again. DORA casts a wide net across the EU’s financial sector and third-party ICT service suppliers—regardless of where those service providers are based.

DORA compliance applies to financial institutions and related entities, including:

• Banks
• Investment firms
• Insurance companies
• Credit rating agencies
• Crowdfunding service providers
• Crypto-asset service providers
• Trade repositories
• Payment processors
• Account information service providers
• Employer-sponsored retirement plan providers
• Data reporting service providers

What Systems and Strategies Does DORA Cover?

The official DORA regulation is comprehensive, covering several areas related to IT security and operational resilience:

ICT risk management

Financial organizations need robust systems to handle ICT risks (like outages, spam, viruses, cyberattacks, data breaches, or other service failures). Established risk mitigation strategies can help prepare your organization to detect, respond to, and recover from ICT problems and incidents.

Incident reporting

The DORA legislation sets a standard process for reporting ICT-related incidents and cyber threats, including who and when to report to and how to categorize these incidents.

Digital operational resilience testing

Organizations are required to regularly test their ICT systems, including checking for vulnerabilities, testing network security, and, in some cases, performing advanced cyberattack simulations.

Third-party risk management

Financial organizations need to actively check and monitor the security practices of their key partners to reduce and manage risks from outsourced ICT service providers.

Oversight framework for critical ICT service providers

The directive is a regulatory framework for overseeing critical third-party ICT service providers, even those outside the EU.

How Can Businesses Maintain DORA Compliance?

With DORA now fully enforceable as of January 2025, organizations must shift from preparation to ongoing compliance and continuous improvement. The focus is no longer just on meeting regulatory deadlines—it’s about embedding operational resilience into everyday business practices.

Maintaining compliance requires demonstrating that your organization can consistently identify, manage, and recover from ICT-related disruptions while meeting the European Supervisory Authorities’ (ESAs) detailed technical standards for risk management, testing, and reporting.

The following best practices can help you sustain compliance, strengthen resilience, and stay audit-ready:

1. Do a gap analysis

Start by assessing your current readiness. Conduct a gap analysis, such as an operational risk assessment, to see where you stand and identify weak spots.

1. Review DORA’s essential requirements across core compliance areas: ICT risk management, incident reporting, digital resilience testing, and third-party risk management.
2. Compare these requirements to your organization’s existing risk management plans, procedures, and practices.
3. Identify specific areas where your current approach falls short of DORA standards.

2. Upgrade your ICT risk management practices

Once you’ve completed risk identification and know where you fall short, create an implementation and/or improvement plan. For best results, your ICT risk management plan should address all stages of the risk management lifecycle. Involve senior management in the process to give your initiatives the momentum and buy-in they need.

Depending on your current situation, the following ICT risk management strategies may apply:

• Implement stronger security measures like access controls, authentication, and encryption
• Create standard procedures for monitoring, classifying, and reporting ICT incidents to competent authorities
• Regularly test ICT systems with vulnerability assessments and penetration tests
• Practice incident response plans with tabletop exercises or drills
• Take a risk-based approach to network and infrastructure management
• Stay updated on new cyber risks and regulatory requirements
• Define clear roles and responsibilities for ICT risk management
• Use threat intelligence to constantly identify and monitor ICT risks, cyber threats, and vulnerabilities
• Build a security operations center to handle ICT threats proactively

3. Strengthen third-party risk management

DORA may shift the way you work with subcontractors or outside vendors. Instead of simply taking them at their word, your organization must manage third-party risks in line with DORA guidelines. Due diligence for critical ICT third-party service providers will be multi-faceted and could include:

• Defining risk appetite and tolerance levels to guide decision-making
• Evaluating the provider’s security measures, policies, and controls
• Investigating their reputation and track record
• Assessing their operational resilience and ability to recover from disruptions
• Verifying regulatory compliance, especially with DORA standards
• Including DORA-aligned contract language, such as for audit and inspection rights, and termination conditions for non-compliance
• Continuously monitoring and assessing third-party compliance with security standards
• Classifying third parties into risk categories (high, medium, low), with enhanced due diligence for high-risk providers

4. Run training and awareness programs

If you’re reading this, you probably already know that a risk awareness culture goes a long way in making your company safer. Studies show that the majority of data breach incidents are caused by employee mistakes—as much as 74%, according to one report. This indicates that security awareness training programs can help organizations respond better to and prevent more such incidents.

The most effective training and awareness efforts are ongoing and multi-faceted, helping you cover all your bases and operate in a state of continuous improvement. Go beyond simply briefing your teams on DORA requirements—consider some or all of the following initiatives:

• Offer year-round training on DORA requirements, ICT risks, and security best practices
• Create clear ways for staff to report risk-related issues
• Use a mix of training methods like simulations and workshops to keep employees engaged
• Run regular phishing tests to improve spotting and reporting of suspicious emails
• Develop specific training for different roles based on their unique risks
• Track how well training works by measuring KPIs such as incident rates and response times
• Build a culture where employees feel safe reporting risks
• Update training frequently to cover new threats and changes in cybersecurity
• Use rewards or games to motivate staff to follow security practices and engage in training

Staying Ahead With Digital Resilience and DORA

Our reliance on technology to deliver essential services continues to grow—along with the potential impact of disruptions. Under DORA, digital resilience is no longer optional; it’s a core business requirement. As we face growing demands and potential threats, having a solid digital resilience strategy helps safeguard your business and prepares you for additional new regulations.

Building a mature digital resilience strategy does more than ensure compliance—it enhances operational continuity, reduces financial and reputational risk, and positions your organization to adapt to emerging threats. By treating DORA not as a checkbox exercise but as a long-term framework for resilience, your business will be better equipped to thrive in an increasingly digital and regulated world.