DORA

DORA creates a comprehensive framework for digital operational resilience in financial services. It requires financial entities to implement robust ICT risk management, report major ICT incidents, test their digital resilience regularly, and manage risks from third-party ICT service providers including cloud platforms.

The Digital Operational Resilience Act harmonizes ICT risk management across the EU financial sector. It applies to banks, insurers, investment firms, payment providers, crypto-asset service providers, and critical ICT third-party providers. Financial entities must establish ICT risk management frameworks, maintain incident response capabilities, and conduct regular digital resilience testing including threat-led penetration testing. Third-party risk management is a core focus: entities must identify dependencies, assess concentration risk, and ensure contractual arrangements include audit rights and exit strategies. Critical ICT third-party providers (like major cloud platforms) face direct EU oversight through a Lead Overseer framework. DORA addresses concentration risk in the financial sector’s reliance on a small number of technology providers.