Jun 2025 by
Cyberattacks, IT failures, and digital disruptions have become everyday concerns for financial institutions. These events don’t just interrupt systems - they erode customer trust, invite regulatory scrutiny, and in some cases, jeopardize an organization’s long-term survival. Recognizing the scale of this threat, the European Union has introduced the Digital Operational Resilience Act (DORA) - a landmark regulation now in force across the financial sector.
DORA marks a shift in how operational resilience is understood and enforced in a digital-first economy. It’s no longer enough to have security policies on paper or reactive procedures in place. Financial entities are now expected to proactively manage, document, and demonstrate their ability to withstand ICT-related disruptions. Not just to regulators, but to customers, partners, and stakeholders who expect accountability at every level.
DORA, short for the Digital Operational Resilience Act, is a regulation enacted by the European Union to ensure that financial entities can withstand and recover from severe operational disruptions related to their digital systems. Introduced as part of the EU’s broader Digital Finance Package, DORA is the first regulation of its kind to address digital operational resilience across the entire financial sector with such specificity and scope.
Unlike previous directives that may have only hinted at the need for digital risk management, DORA mandates concrete actions and cross-functional accountability. It creates a unified legal framework for managing ICT (Information and Communication Technology) risks, closing the patchwork of national regulations that previously existed. This is a game-changer for financial institutions, as well as the technology vendors that support them.
By introducing clear and enforceable rules, the regulation aims to make financial markets more stable and secure. DORA not only outlines the expectations for internal ICT systems but also extends the compliance responsibility to external third-party providers that deliver digital services. This includes everything from cloud storage and network services to incident response tools and outsourced IT operations.
The scope of DORA is wide - intentionally so. It covers virtually every player in the financial system, ranging from well-established banks and insurance companies to emerging fintech firms. Specifically, DORA applies to credit institutions, investment firms, payment institutions, electronic money institutions, pension funds, insurance and reinsurance undertakings, and crypto-asset service providers. But it doesn’t stop there.
Any third-party ICT service providers that offer essential digital services to these financial institutions are also impacted. That means cloud computing providers, software vendors, managed security service providers, and even consulting firms that handle operational processes must pay attention. The ripple effects of this regulation are significant. Even if your company isn’t directly regulated by DORA, being part of a financial supply chain could subject you to its expectations.
This inclusion of ICT vendors highlights EU’s growing recognition, that outsourcing digital operations doesn’t eliminate risk - it merely shifts where and how the risk needs to be managed. As a result, vendors who ignore DORA may find themselves excluded from procurement processes or facing increased scrutiny during due diligence.
At its core, DORA is built around five operational pillars, each addressing a critical area of digital risk and resilience.
1. ICT Risk Management
The first pillar, ICT risk management, requires financial institutions to build systems and governance structures that actively manage digital risks. This includes mapping their digital assets, identifying vulnerabilities, and implementing mitigation measures that are reviewed regularly. It's not enough to have a cybersecurity policy. Organizations must prove that their risk management practices are dynamic, tested, and embedded into daily operations.
2. Incident Reporting
Incident reporting mandates timely and structured communication of major ICT incidents to national regulators. These incidents could include data breaches, service outages, cyberattacks, or operational failures. The reporting requirements are standardized to ensure authorities receive consistent and actionable information. Institutions must also maintain internal procedures for classifying incidents and conducting post-mortem analysis.
3. Testing ICT Defenses
The third pillar focuses on testing ICT systems. DORA requires ongoing testing of digital defenses, including advanced practices like threat-led penetration testing (TLPT) for critical institutions. These tests must simulate real-world scenarios and go beyond standard vulnerability scans. The goal is to build confidence that systems can withstand actual threats, not just theoretical risks.
4. Third-Party Risk Management
Financial institutions must assess, monitor, and document the risks associated with their ICT service providers. This includes due diligence before onboarding vendors, continuous performance monitoring, and clear contractual provisions around security and incident reporting. Essentially, DORA holds financial entities accountable for the actions (or failures) of their vendors.
5. Information Sharing
DORA encourages - and in some cases, requires - institutions to participate in trusted networks where cyber threat intelligence is shared. The idea is to build a collective defense across the financial ecosystem by enabling faster responses to emerging threats and minimizing the duplication of effort.
The Digital Operational Resilience Act is now in force. Since January 2025, all financial institutions and critical ICT providers operating within the EU are expected to comply with its requirements. Organizations must now be able to demonstrate that they are actively managing digital operational resilience in line with the regulation.
Regulators may request evidence of compliance at any time, and institutions need to be prepared for audits, performance assessments, and follow-up inquiries. This includes having documented processes for ICT risk management, incident response, testing, vendor oversight, and information sharing.
Delaying implementation could lead to:
Recent high-profile disruptions - whether caused by ransomware or cloud service outages - have shown how fragile digital systems can be. DORA aims to ensure those systems are reinforced before disaster strikes. It fundamentally changes how organizations need to think about digital risk. Where cybersecurity was once confined to IT departments, DORA requires cross-functional participation. Risk officers, compliance professionals, legal teams, and senior executives must now align on how resilience is measured, maintained, and demonstrated.
While DORA is often framed as a compliance burden, there are clear strategic benefits to taking it seriously:
For third-party vendors, being “DORA-ready” could also be a key differentiator when bidding for financial sector contracts.
Now that DORA is in force, the priority for financial institutions and ICT vendors is no longer preparation but about proving that their operational resilience measures are working in practice. Regulators across the EU are beginning to assess how well organizations are implementing the regulation. This includes reviewing documentation, testing protocols, third-party oversight, and incident response capabilities. If your organization hasn’t yet taken concrete steps, the risk of falling behind - both legally and operationally - increases with every passing day.
If you haven't already conducted a thorough compliance review, that is your starting point. A detailed gap analysis will help identify any misalignment between your current digital resilience capabilities and the expectations set by DORA. Even if you’ve previously made progress toward compliance, the regulation’s ongoing requirements - such as recurring testing, updated risk registers, and active monitoring of third-party service providers - demand continuous oversight. This means regularly revisiting policies, controls, and reporting structures to ensure they remain effective and relevant.
Organizations should also assess how well their ICT risk management frameworks are integrated across departments. True operational resilience isn't maintained by a single team. It must be embedded across legal, compliance, IT, procurement, and executive leadership.
One of the most overlooked challenges with DORA is the skills gap. While policies and frameworks are important, successful implementation depends on people who understand how to apply them. This is especially relevant for individuals responsible for compliance oversight, third-party risk management, and ICT governance. These roles require not only regulatory understanding but also the ability to interpret and operationalize complex requirements in day-to-day processes.
To meet that need, Readynez offers a dedicated one-day course: “DORA Essentials – Building Robust Digital Operational Resilience.” The course is designed for professionals across the financial sector - including legal advisors, compliance officers, IT leaders, and senior decision-makers - who need a practical, actionable understanding of DORA. Led by regulatory expert Anette Pedersen, the course combines instructor-led sessions, group exercises, and a structured compliance checklist to help participants evaluate their current state and define next steps.
Training is not just about checking a box. It’s about building internal capability, fostering ownership, and enabling teams to act with confid ence - whether during a regulatory inspection, a cybersecurity incident, or a vendor review.
Join our DORA Essentials course to turn regulatory requirements into real-world readiness.
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