Digital Operational Resilience Act (DORA)

Overview of the Regulation and Its Purpose

The Digital Operational Resilience Act (DORA) is a regulation established by the European Union aimed at enhancing the digital operational resilience of the financial sector. Its primary purpose is to ensure that financial institutions can withstand, respond to, and recover from all types of ICT-related disruptions and threats. DORA lays out a comprehensive framework to strengthen the operational resilience of the financial system, which is vital as digital technologies become increasingly integral to financial services.

Who Must Comply and When It Applies

DORA applies to a wide range of entities within the financial sector, including:

• Banks
• Investment firms
• Insurance companies
• Payment service providers
• Electronic money institutions
• Financial market infrastructures

The regulation's compliance timeline is structured around its implementation phases. Institutions are expected to start aligning their operations with DORA by January 2025, following the final legislative approval.

Key Requirements Relevant to Migrations

When planning migrations under DORA, teams should focus on the following key requirements:

• Risk Management: Establish a robust risk management framework that identifies and mitigates risks associated with ICT systems and data migrations.
• Incident Reporting: Develop procedures for reporting significant ICT-related incidents to the relevant authorities within specified timelines.
• Third-Party Risk: Assess and manage risks linked to third-party service providers, including cloud services. Ensure due diligence when migrating data.
• Testing: Conduct regular testing of ICT systems to verify resilience measures and identify vulnerabilities before and after migrations.

How to Ensure Migration Compliance

To ensure compliance during migrations, consider these actionable steps:

1. Conduct a Risk Assessment: Evaluate potential risks associated with the migration of data, applications, and systems.
2. Documentation: Maintain comprehensive documentation of migration plans, risk assessments, and compliance measures.
3. Stakeholder Engagement: Involve all relevant stakeholders, including IT, legal, and compliance teams, early in the migration process.
4. Training: Provide training sessions for staff involved in the migration to ensure awareness of DORA requirements and best practices.

Documentation and Audit Requirements

DORA emphasizes the importance of thorough documentation and regular audits. Key requirements include:

• Migration Plans: Detailed documentation outlining the migration process, including timelines, resources, and risk assessments.
• Audit Trails: Maintain audit trails of all migration activities to facilitate external audits and internal reviews.
• Incident Logs: Keep logs of any ICT incidents related to the migration process, including how they were managed and resolved.

Common Compliance Mistakes to Avoid

While navigating DORA compliance, avoid these common pitfalls:

• Neglecting Risk Assessment: Failing to conduct a comprehensive risk assessment can lead to unaddressed vulnerabilities.
• Inadequate Documentation: Poor documentation can hinder compliance verification and increase the risk of non-compliance.
• Ignoring Third-Party Risk: Not assessing the resilience of third-party providers can expose organizations to additional risks.
• Lack of Communication: Failing to engage with stakeholders can result in misalignment and oversight.

Tools and Processes That Help Maintain Compliance

To maintain compliance with DORA during migrations, utilize the following tools and processes:

• Risk Management Software: Implement tools that help identify, assess, and monitor ICT-related risks.
• Project Management Tools: Use project management software to track migration plans and ensure adherence to timelines and compliance requirements.
• Audit Management Solutions: Leverage audit management tools to streamline documentation and facilitate compliance checks.
• Training Platforms: Implement e-learning platforms to provide ongoing training on DORA requirements and operational resilience best practices.

By aligning migration strategies with DORA's requirements, financial institutions can enhance their digital operational resilience while ensuring compliance and minimizing risks.