Digital operational resilience act
DORA Consulting
What is the Digital Operational Resilience Act?
The Digital Operational Resilience Act (DORA) is a regulatory framework introduced by the European Union to ensure that financial institutions and related entities can withstand, respond to, and recover from information and communication technology (ICT) disruptions. The act is designed to address the growing dependency on digital technologies within the financial sector and to strengthen the overall digital resilience of financial entities across the EU.
How Does DORA Impact the Financial Sector?
DORA has a profound impact on the financial sector by setting a standardized framework for managing digital risks across all financial institutions. This regulation mandates that banks, insurers, payment providers, and other financial entities adopt robust ICT (Information and Communication Technology) risk management practices. By doing so, DORA strengthens the resilience of the entire sector against cyber threats, operational disruptions, and data breaches.
Key principles of DORA
The DORA principles revolve around five core areas:
ICT risk
management
Financial entities must develop robust strategies for managing ICT risks, including identification, assessment, and mitigation.
Incident
reporting
Institutions are required to report significant ICT-related incidents to relevant authorities promptly.
Operational resilience testing
Regular testing, including advanced methods like threat-led penetration testing, must be conducted to ensure systems can withstand disruptions.
Third-party risk management
Ensuring that third-party ICT service providers comply with DORA’s stringent resilience standards is crucial.
Information
sharing
Encourages financial entities to share information related to cyber threats and ICT incidents to enhance collective resilience.
Regulation and requirements
The DORA regulation establishes strict standards for financial institutions to strengthen their digital resilience against threats and disruptions. Key requirements include developing comprehensive ICT risk management strategies, conducting regular operational resilience tests, and ensuring that third-party providers meet these high standards.
DORA and the European Commission
The Digital Operational Resilience Act (DORA) is a key part of the European Commission’s strategy to strengthen digital resilience in the financial sector. Developed in response to rising cyber threats and increased reliance on digital infrastructure, DORA aims to ensure that the financial industry remains robust and secure in today’s digital landscape.
Timeline and implementation
Understanding the DORA timeline is essential for financial institutions aiming for compliance. Proposed by the European Commission in September 2020, the regulation will apply from 17 January 2025. Financial entities must follow a phased implementation, including initial assessments, meeting reporting obligations, and integrating resilience testing into regular operations.
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Summary
In summary, the Digital Operational Resilience Act is a comprehensive regulatory framework aimed at strengthening the digital resilience of the financial sector in the EU. It encompasses a wide range of requirements, from ICT risk management to third-party risk controls, ensuring that financial institutions can operate effectively even in the face of significant digital disruptions.
DORA consulting services
At Aplite, we offer specialized DORA consulting services to help financial institutions comply with the requirements of the DORA regulation. Our DORA consultation services include comprehensive assessments, strategic planning, and the implementation of robust ICT risk management frameworks. Whether you need guidance on specific DORA anforderungen or a full-scale DORA beratung, our experts are here to support your organization through the compliance process.
What is TLPT?
Threat-Led Penetration Testing (TLPT) is a form of advanced cybersecurity assessment designed to simulate real-world cyberattacks on financial institutions using threat intelligence to emulate tactics employed by actual threat actors. It involves conducting controlled, covert attacks to test the institution’s resilience against cyber threats, particularly in their detection and response abilities.
What sets TLPT under DORA apart from standard penetration testing in the financial sector?
Under DORA, TLPT is mandated as a legal requirement for qualifying financial institutions across the EU. Unlike standard penetration testing, TLPT uses the TIBER-EU framework, emphasizing threat intelligence and realistic attack simulations. This approach involves multiple phases, specialized teams, and specific coordination with the TLPT authority, which ensures a structured and standardized methodology. DORA also requires certain collaborative elements, such as mandatory purple teaming, which focuses on combining offensive and defensive teams to enhance security resilience.
How does TLPT under DORA work?
TLPT under DORA involves a structured, multi-phase process:
Preparation Phase
The institution forms a control team, defines the scope, and selects or procures external testers and threat intelligence providers.
Testing Phase
Involves threat intelligence gathering to create realistic attack scenarios, followed by red team testing to simulate attacks on live systems over an extended period.
Closure Phase
After testing, results are analyzed, and collaborative purple teaming is conducted to assess and improve defenses. A remediation plan is developed based on findings, which is then reviewed by relevant stakeholders.
Which financial institutions fall under DORA’s TLPT requirement, and what makes them eligible for this testing?
DORA mandates TLPT for certain high-impact financial entities. Eligibility is based on criteria such as:
Systemic Importance
Institutions like significant banks, insurance companies, and payment providers are included if they have a critical role in the EU financial system.
ICT Maturity and Risk Profile
Entities with a mature ICT infrastructure and a substantial risk profile in terms of ICT vulnerabilities are prioritized.
Thresholds and Operational Impact
Specific thresholds are set for payment transactions and other operational measures to assess the institution’s impact on financial stability.
Which Financial Entities Are Required to Perform TLPT Under DORA?
The Digital Operational Resilience Act (DORA) mandates Threat-Led Penetration Testing (TLPT) for specific high-impact financial entities, based on their size, market influence, and systemic importance. These criteria ensure that only institutions critical to financial stability are included. Entities required to perform TLPT under DORA include:
Credit Institutions
Global Systemically Important Institutions (G-SIIs) and Other Systemically Important Institutions (O-SIIs) whose global or regional operations significantly impact financial stability.
Payment Institutions
Institutions with annual payment transactions exceeding EUR 150 billion for each of the previous two years, emphasizing high transaction volume and market presence.
Electronic Money Institutions
Institutions with more than EUR 150 billion in annual payment transactions or EUR 40 billion in outstanding electronic money, highlighting substantial activity in the e-money sector.
Central Securities Depositories and Central Counterparties
As key players in the clearing and settlement of securities transactions, these entities are crucial for maintaining operational resilience in the financial system.
Trading Venues
Venues holding the highest national market share in securities or derivatives for the past two years, or those with a market share exceeding 5% at the EU level, underscoring their importance in the financial markets.
Insurance and Reinsurance Undertakings
Large insurers and reinsurers meeting specific thresholds for gross written premiums, technical provisions, and total assets, reflecting their impact within the insurance sector.
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How does adopting the TIBER-EU framework support financial institutions in meeting DORA’s TLPT requirements?
Adopting the TIBER-EU framework enables financial institutions and authorities to meet DORA’s Threat-Led Penetration Testing (TLPT) requirements by providing structured guidance and a controlled approach for conducting cyber resilience tests. The framework outlines detailed roles for threat intelligence providers, red team testers, and authorities, ensuring that TLPT is executed safely on live production systems. TIBER-EU’s alignment with DORA helps financial entities streamline their compliance efforts, offering consistent quality and security standards across the EU for TLPT tests.
How Aplite can help you
Aplite provides a range of DORA services designed to help financial institutions navigate the complexities of the Digital Operational Resilience Act. Our services include:
Risk
Assessments
Evaluating your current ICT risk management practices against DORA requirements.
Implementation Support
Assisting with implementation of DORA-compliant processes and systems.
Training and Education
Offering training programs to ensure your team understands and can meet DORA obligations.
Ongoing Consultation
Providing continuous support to maintain compliance and adapt to any updates in the regulation.
FAQs
The Digital Operational Resilience Act (DORA) is an EU regulation that ensures financial institutions can withstand and recover from ICT disruptions, strengthening their overall digital resilience.
The DORA timeline involves several stages, from initial assessments to full compliance with reporting obligations and resilience testing, with specific deadlines set by the European Commission.
DORA’s key principles include ICT risk management, incident reporting, operational resilience testing, third-party risk management, and information sharing.
Aplite offers DORA consulting services, including risk assessments, implementation support, training, and ongoing consultation to help financial institutions comply with DORA requirements.
DORA specifically targets digital resilience for financial entities within the EU, requiring regulatory reporting and third-party oversight, whereas ISO 27001 provides a global framework for information security management applicable across industries.
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Ensure your organization is ready to meet the stringent requirements of the Digital Operational Resilience Act. Contact Aplite today to learn more about our DORA consulting services and how we can help you achieve compliance with confidence.