What is DORA, Digital Operational Resilience Act?
The European Commission has issued the Digital Operational Resilience Act (DORA) with the aim of enhancing the operational resilience of the European Union’s financial sector. DORA is structured around three fundamental principles:
IT and Cybersecurity Risk Management: Financial institutions would be mandated to identify, assess, and manage their IT and cybersecurity risks. The regulation would necessitate institutions to establish policies and procedures that safeguard their systems and data from cyber threats.
Business Continuity Management: Financial institutions would be obligated to develop comprehensive business continuity plans, ensuring their ability to provide services to clients during operational disruptions. This encompasses the implementation of backup systems, alternative communication channels, and disaster recovery plans.
Supervision and Oversight: The regulation would introduce a framework for supervisory and oversight authorities to monitor and evaluate the operational resilience of financial institutions. This includes granting supervisory authorities the authority to conduct inspections, request information, and impose sanctions when necessary.
DORA is designed to fortify the EU’s financial sector by guaranteeing that financial institutions possess the essential processes, systems, and controls to withstand and respond to operational disruptions effectively.
The DORA regulation is set to come into effect on the 17th of January 2025. This date marks a key milestone for financial institutions, as they will need to comply with the new requirements outlined in the legislation.
As we approach the implementation date, it’s essential for financial institutions to familiarize themselves with the DORA regulation and take the necessary steps to ensure compliance. With the regulation coming into effect on January 17th, 2025, now is the time for financial institutions to prepare and adapt to these new requirements.
What are the main objectives of the DORA regulation?
The main objectives of (DORA) regulation are:
Enhancing the EU’s Financial Sector Operational Resilience: The regulation strives to guarantee that financial institutions possess robust processes and systems to withstand and respond to operational disruptions such as cyberattacks, IT failures, and other threats.
Augmenting Customer Data Protection: The regulation mandates financial institutions to implement effective cybersecurity measures to safeguard customer data and avert data breaches.
Establishing a Level Playing Field across the EU: The regulation introduces a uniform set of standards and requirements for operational resilience, ensuring that all financial institutions operating within the EU adhere to the same standards.
Reinforcing the Role of Supervisory Authorities: The regulation endows supervisory authorities with enhanced powers to monitor and evaluate the operational resilience of financial institutions, and take necessary actions to address any weaknesses or failures.
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