Navigating DORA – a Guide to operational resilience for financial institutions
Navigating DORA - a Guide to operational resilience for financial institutions
The Digital Operational Resilience Act (DORA) is set to reshape the regulatory landscape for financial institutions across the European Union. Coming into effect on January 17, 2025, DORA aims to improve risk management practices and safeguard critical financial operations, ensuring stability in an increasingly digitalized environment. The act provides clear guidelines for managing digital risks, with a strong emphasis on identity management and access control.
Why does DORA matter?
The Digital Operational Resilience Act (DORA) is not just another regulation—it represents a paradigm shift in how financial institutions approach operational resilience and risk management in the digital age. By creating a single regulatory framework, DORA addresses the fragmented nature of previous regulations and sets a consistent standard across the European Union.
Similar to NIS-2, DORA extends its scope beyond just financial institutions to include third-party ICT service providers that are critical to the operations of those institutions. These third parties must comply with DORA’s requirements, including the obligation to report significant incidents that could affect the critical operations of financial institutions or other related entities.
Thus, DORA applies to a wide range of entities, including:
• Banks, investment firms, and payment service providers,
• ICT third-party service providers to financial institutions,
• Financial market infrastructures, and
• Other entities involved in critical financial operations.
With the January 2025 deadline approaching, early adoption and adherence to DORA’s requirements can help these organizations avoid regulatory penalties while enhancing their operational and cybersecurity capabilities.
As we move forward, let’s take a closer look at the specific provisions under DORA related to identity management (Article 20) and access control (Article 21)—both of which play a crucial role in achieving compliance and securing digital operations.
Identity management under Article 20
DORA requires financial institutions to establish robust identity management policies to control access to their ICT systems and sensitive data. Every user, whether internal staff or third-party service providers, must have a unique identity linked to their role. This ensures accountability and traceability for all actions performed within the organization’s systems.
Key to this process is a comprehensive lifecycle management system that governs the creation, modification, deactivation, and termination of user accounts. Financial entities are also obligated to maintain detailed records of all identity assignments, even following organizational changes or the end of contractual relationships. DORA encourages the use of automated solutions to streamline these processes, reduce administrative burden, and minimize human error.
By enforcing these measures, DORA ensures that only authorized individuals can access critical systems and information, reducing the risk of misuse or cyberattacks.
Access control under Article 21
Article 21 builds on the principles of identity management by mandating comprehensive access control policies. These policies should also enforce a segregation of duties to prevent users from holding conflicting roles or gaining excessive access that might allow them to bypass internal controls. This approach aligns with the principles of least privilege and need-to-know, minimizing unnecessary access and potential risks.
DORA also requires institutions to implement strong authentication methods, such as multi-factor authentication, for critical systems and remote access. Additionally, access rights must be reviewed and updated regularly to reflect organizational changes. Institutions must also ensure proper assignment of roles to manage access efficiently, aligning permissions with user responsibilities and minimizing unnecessary access.
Effective access control ensures that institutions can tightly regulate who can access their systems, safeguarding against internal and external threats while maintaining operational efficiency.
Opportunities and challenges
Implementing DORA’s requirements presents both challenges and opportunities for financial institutions. Smaller organizations may face resource constraints, and integrating new technologies into legacy systems can be complex. The need for specialized training and organizational adjustments may also create hurdles.
However, these challenges come with significant opportunities. Compliance with DORA strengthens cybersecurity, streamlines operations through automation, and enhances customer trust by demonstrating a commitment to robust security measures.
Institutions that proactively embrace DORA’s standards can reduce long-term risks, minimize operational disruptions, and position themselves as leaders in a more secure financial ecosystem.
Early preparation is key to capitalizing on the benefits of improved security and operational resilience.
How can IDVKM support your compliance journey?
Navigating DORA’s complex requirements is no small task, but IDVKM is here to provide expert guidance and solutions tailored to financial institutions. With a focus on operational resilience, identity management, and access control, IDVKM ensures organizations are equipped to meet DORA’s stringent standards efficiently.
Contact us today at info@idvkm.com or visit idvkm.com to receive expert assistance.
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