Brad Christian

Brad Christian

Senior Search Engine Optimization Specialist

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Understanding DORA

The Digital Operational Resilience Act (DORA) is a landmark European Union (EU) regulation that aims to strengthen the security and performance of financial institutions, such as banks, insurance companies, and investment firms, that provide services within the EU. It is designed to ensure that financial entities can withstand, respond to, and recover from information and communications technology (ICT) related disruptions and cyberthreats. In doing so, DORA establishes a unified framework for ICT risk management for financial institutions.

DORA requires financial institutions to follow a strict set of guidelines to safeguard against ICT-related incidents. These include but are not limited to measures for detection, containment, protection, recovery, and repair from cyberattacks. It also features clear rules around ICT risk management, including operational resilience testing and incident reporting.

Five pillars of DORA compliance

Why Was DORA Introduced?

DORA seeks to address critical gaps in EU financial regulations. By implementing DORA, EU regulators have created measures that encompass all aspects of operational resilience, from service performance to cyber risk management, with an emphasis on ICT. This helps achieve the EU's goal of ensuring a resilient financial ecosystem.

Key Objectives of DORA

DORA aims to enhance the digital resilience of financial entities across the EU. This is done by strengthening cybersecurity and performance standards across EU member states to ensure the resilience of  digital services and safety of sensitive information. This is all done with the goal of protecting consumers and investors from operational risks, such as cyberattacks, breaches, and more. 

Who Does DORA Apply To?

DORA applies to a wide range of entities that play a role in the financial ecosystem. First, there are financial institutions, such as banks, insurance companies, and payment service providers, who conduct business within the EU regardless of where they are based. Next, there are ICT service providers who facilitate the necessary infrastructure and communication platforms for financial entities. Then there are third-party vendors who are involved in financial operations, such as data analytics providers, loan origination platforms, and more.

Any other entity that plays a critical role in ensuring the operational resilience of the financial ecosystem may also have to comply with DORA regulations.

Core Components of DORA

Core Components of DORA

There are five key components of DORA:

  1. Information Sharing: Encourages collaboration between financial entities. This helps entities learn from others to ensure threats are not successful at scale. Sharing this information aids in strengthening the cybersecurity stance of the financial industry as a whole while standardizing approaches to ensure consistent resilience.
  2. ICT Risk Management: Establishes requirements for frameworks to include the set-up and maintenance of resilient ICT systems that minimize risk, prompt detection of anomalous activities, established mechanisms to learn and improve based on external events and an entity's ICT incidents, comprehensive business continuity practices and plans to ensure prompt recovery, and continuous identification of ICT risks to configure protection and prevention tactics.
  3. ICT Third-Party Risk: Aims to minimize service disruptions from third-party vendors by ensuring sound monitoring of risks associated with ICT third-party providers and ensuring that contracts with third-party ICT providers include key monitoring and accessibility information, including where data is being processed.
  4. ICT-Related Incident Reporting: Sets forth guidelines and processes to monitor and log ICT-related incidents. This includes classification criteria, the templatization of reporting, and the formalization of the reporting process.
  5. Digital Operational Resilience Testing (DORT): Components of the ICT risk management protocol should be regularly tested for efficacy and preparedness. This works to identify weaknesses and gaps in protections, allowing them to be closed and fixed quickly.

These components seek to enhance the digital resilience of financial entities across the EU and beyond by protecting consumers and investors from operational risks and keeping their financial and personal standing safe and secure.

Benefits of DORA

Widespread DORA compliance can provide a host of benefits, including improved security and resilience across financial entities, leading to a more secure financial ecosystem. DORA also reduces the risk of financial and reputational damage for institutions that abide by guidelines and maintain compliance. Compliant entities also benefit from consumer and stakeholder trust gained by the enhanced security and safety of private and sensitive information.

How to Achieve DORA Compliance

Compliance with DORA guidelines is required as of January 17th, 2025, but there are ongoing steps to take to maintain compliance.

First, regular, ongoing gap analyses are necessary to identify potential weak points in a financial institution's security stack. This is a repeatable task that requires comprehensive and scalable network observability to be successful.

A robust risk management framework is another key component of DORA compliance. This framework must be well-documented and focus on managing ICT risks while taking a proactive approach to defenses. It must include strategies, policies, and procedures. It also must contain ICT protocols and tools that are necessary for the adequate protection of all information and ICT assets, such as software, servers, hardware, physical components, and infrastructures, like data centers, to ensure that assets are properly protected from cyberthreats.

Next, employees must be instructed on ICT resilience to ensure they are aware of the issues and have a trained eye to spot potential issues. This is not to say that all employees need to become cybersecurity experts, but the team is only as strong as its weakest member, necessitating the education of staff to strengthen security stance.

Finally, entities must have clear incident reporting protocols should an issue arise. This is to be in conjunction with reporting requirements set out by DORA, including the frequency and required contents of reports during and after an incident.

Challenges and Considerations of DORA Compliance

When achieving and maintaining DORA compliance, there are several hurdles and challenges to overcome:

  • Number of requirements: There are a large number of requirements to obtain and maintain DORA compliance. The most notable of these refer to ICT vendor contracts and policies, necessitating the thorough review of agreements in order to ensure compliance.
  • Mapping of critical and important functions (CIFs): Thorough documentation of CIFs is required for compliance. This is a massive undertaking due to the level of detail required. The documentation must also be 'living' and evolve as security measures and ICT agreements change.
  • ICT subcontractor management: Managing the long chain of ICT vendors and subcontractors can be a mammoth task. This requires attention to detail, thorough review, and mapping of where each subcontractor fits within the CIF ecosystem.
  • Threat-led penetration testing (TLPT) scope: DORA requires a business-wide scope for TLPT which can be cumbersome. This is to ensure that all areas of the business are tested for vulnerabilities, but the scale this requires can be massive.
  • Subjective definitions: DORA definitions can leave a lot to interpretation. The subjective nature of the definitions within the act can leave organizations wondering if they are truly compliant or misinterpreting the intended standards.

One major consideration financial entities must weigh is the balance of operational costs with compliance requirements. These necessary steps can be costly, so delicate budgeting can be imperative to maintaining an adequate balance.

Frequently Asked Questions

What are the penalties for non-compliance with DORA?

  • Penalties for non-compliance vary by EU member state but can include significant financial fines, reputational damage, and operational restrictions. Regulators may also require non-compliant organizations to take corrective actions within a defined timeframe.

How does DORA differ from other compliance frameworks?

  • Unlike other regulations, DORA focuses specifically on digital operational resilience in the financial services sector. It provides a holistic framework that includes risk management, incident reporting, resilience testing, and third-party oversight. It complements existing frameworks like the GDPR and NIS directive but is tailored to financial institutions. It secures systems and services, where systems consist of interdependent ICT providers, and services are those offered to customers.

Are non-EU entities required to comply with DORA if they operate in the EU?

  • Yes, if a non-EU company provides financial services or ICT services to EU-based entities, it must adhere to DORA's requirements. This ensures that operational resilience standards are maintained throughout the supply chain.

What constitutes an ICT-related incident under DORA?

  • An ICT-related incident is any event that disrupts or compromises the ability, integrity, or confidentiality of ICT systems used by a financial entity. Examples include cyberattacks, customer service failures, third-party outages, or DDoS attacks. Significant incidents must be reported to the relevant authorities within a specified timeframe.

How does DORA address third-party risk?

  • DORA requires financial entities to evaluate and monitor the ICT risks associated with third-party providers. Contracts with third parties must include clear provisions for risk management, incident reporting, and compliance audits. Critical third-party providers may also face direct oversight by EU regulators.

How does DORA impact small financial entities or startups?

  • DORA applies to all financial entities, regardless of size. However, smaller entities may face fewer administrative requirements. They must still ensure ICT risk management, resilience testing, and incident reporting but may receive proportional treatment based on their scale and complexity.

What types of testing are required under DORA?

  • DORA mandates regular DORT exercises. This includes penetration tests, vulnerability scans, and simulated cyberattack exercises as well as performance reviews of critical services and systems. This is to ensure that financial institutions can withstand and recover from both cyberthreats and system failures, including performance bottlenecks or operational issues. The goal is to test three key tiers that measure the resilience of systems: performance, cybersecurity, and business continuity.

Does DORA overlap with GDPR requirements?

  • While DORA and GDPR are distinct, they intersect in areas like data protection and incident reporting. DORA focuses on operational resilience, while GDPR emphasizes privacy. Entities must ensure compliance with both, particularly when ICT incidents involve personal data breaches.

How NETSCOUT Helps

Achieving DORA compliance requires a proactive, ongoing strategy to maintain operational continuity and service performance while mitigating cyber risks and ensuring regulatory adherence.

Enhancing Operational Resilience

Financial institutions require continuous oversight of their digital service ecosystem to confidently identify and resolve new and evolving performance and security risks. NETSCOUT delivers real-time observability and security solutions enhanced by deep packet inspection (DPI), helping financial institutions continuously monitor, detect, and mitigate issues that threaten digital resilience and service continuity.

Accelerating Compliance with a Strong Data Foundation

With NETSCOUT’s granular, real-time intelligence, organizations can establish a strong foundation for compliance, operational resilience, and cybersecurity. By proactively managing performance risks and mitigating security threats, financial institutions can align with DORA’s five pillars—Risk Management, Incident Reporting, Resilience Testing, Digital Supply Chain, and Intelligence Sharing—ensuring long-term digital resilience.

Optimizing Network and Service Performance

NETSCOUT helps businesses detect and resolve performance issues across their hybrid, multi-cloud, and on-premises infrastructure before they impact critical operations. With nGenius® Enterprise Performance Management, organizations can monitor network and application performance to minimize service disruptions and ensure seamless user experiences. Granular real-time insights enable compliance teams to rapidly diagnose root causes, prevent disruptions, and maintain the stability of essential financial services.

Strengthening Cybersecurity

Cyber threats pose significant risks to financial institutions, making advanced threat detection a critical component of DORA compliance. Omnis® CyberStream and Omnis Cyber Intelligence leverage deep packet inspection (DPI) and network traffic analysis to identify anomalies, detect threats, and accelerate incident response—helping organizations strengthen their security posture while meeting regulatory requirements.

Supporting Incident Response & Recovery

NETSCOUT enables rapid post-incident analysis to ensure organizations can recover quickly while maintaining compliance with DORA’s incident reporting and resilience testing mandates. Granular insights provide a clear understanding of security events and network disruptions, supporting continuous improvement and regulatory reporting.

Ensuring Digital Supply Chain Visibility

DORA requires financial institutions to assess third-party dependencies and digital supply chain risks. NETSCOUT’s solutions offer continuous observability across complex, distributed environments, helping organizations evaluate vendor risks and maintain compliance across interconnected ecosystems.