A New Era Of Digital Resilience For The EU

Uploaded on 2025-01-21 in NEWS-Cybersecurity News, FREE TO VIEW, BUSINESS-Services-Law

Last Friday the European Union entered a new era of digital resilience with the full implementation of the Digital Operational Resilience Act (DORA).

This regulation introduces a comprehensive framework to help financial institutions not only withstand but also recover quickly from severe Information and Communication Technology (ICT) disruptions.

With cyber threats growing in complexity and our reliance on digital infrastructure growing each day, DORA is a critical step in ensuring the EU’s financial stability.

A Needed Change In Digital Risk Management & Governance

DORA marks a significant shift in how digital risks are managed across the financial sector. Its focus is not merely on compliance, but on resilience. For instance, financial institutions are now required to adopt proactive measures to maintain operations during and after disruptions. The core mission of DORA is to ensure financial entities can
continue functioning, even amidst cyberattacks or ICT failures that could threaten the stability of the broader financial system.

At the heart of DORA’s framework is a robust governance and risk management structure. It mandates that financial institutions implement comprehensive strategies to identify, assess, control and monitor ICT risks.

Institutions must establish procedures to detect anomalies and activate incident response processes promptly, minimising the risk of disruptions escalating. This ensures that they can respond quickly to protect operations and limit potential damage, enhancing long-term operational stability.

Incident Management & Third-Party Risk

DORA emphasises not only incident management but also third-party risk. Institutions must analyse and address the root causes of incidents to prevent recurrence and report them promptly to supervisory authorities. This coordinated approach helps mitigate sector-wide impacts and ensures resilience across the EU financial system, ultimately protecting against broader systemic risks.

A key element of DORA is managing third-party risks. It holds external ICT providers to the same rigorous standards as financial institutions, reducing the potential for cascading failures. DORA also mandates regular threat-led penetration testing (TLPT), which allows organisations to identify and address vulnerabilities proactively before they can be exploited.

The impetus for this being that by simulating real-world attack scenarios, financial institutions can better understand their security gaps and strengthen their defences against emerging threats.

Fostering Collaboration & Building Resilience

Collaboration is crucial to DORA’s success. The regulation encourages the sharing of cyber threat intelligence between financial institutions and supervisory authorities. By participating in trusted communities like the Financial Services Information Sharing and Analysis Center (FS-ISAC), institutions can exchange insights on emerging threats, strengthening collective resilience. This open exchange of information allows organisations to learn from each other’s experiences, improving overall sector preparedness.

By integrating resilience into operational strategies, institutions can recover quickly from disruptions while maintaining security.

This shift will make the financial system more robust, enabling it to withstand cyberattacks, technical failures and crucially make sure it can bounce back faster from failures. As a result, the financial sector will be better equipped to maintain stability and trust, even in times of crisis.

A Transformative Framework For The Future

DORA is more than a compliance framework - it transforms how financial institutions approach risk management. By focusing on resilience at all levels, internal, third-party and sector-wide, DORA ensures that financial institutions can not only survive but thrive in the face of evolving cyber threats. The regulation will create a more secure, resilient financial ecosystem, benefiting both individual institutions and the sector as a whole.

With DORA now fully implemented, the EU financial sector enters a new era where resilience is foundational. Institutions that embrace DORA’s principles will be better equipped to safeguard the stability and security of the broader financial system for years to come.

This proactive approach to digital resilience will ensure that the EU remains at the forefront of securing its financial infrastructure, even as new and more sophisticated risks emerge.

Jamie Moles is Senior Technical Manager at ExtraHop

Image: Unsplash

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