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Who Must Comply with the DORA Regulation?

The Digital Operational Resilience Act (DORA) is a comprehensive regulation aimed at strengthening the resilience of financial entities within the European Union. As part of the EU's broader digital finance strategy, DORA mandates robust risk management practices across the financial ecosystem, ensuring entities can withstand, respond to, and recover from operational disruptions, especially those stemming from ICT (Information and Communication Technology) incidents.

Which Organisations Are Subject to DORA?

DORA applies broadly to most financial institutions operating within the EU, ranging from well-established banks to emerging fintech players. The following financial entity types are explicitly listed in Article 2 of DORA:

• Credit institutions

• Payment institutions

• Account information service providers

• Electronic money institutions

• Investment firms

• Crypto-asset service providers

• Central securities depositories

• Central counterparties

• Trading venues

• Trade repositories

• Managers of alternative investment funds

• Management companies

• Data reporting service providers

• Insurance and reinsurance undertakings

• Insurance intermediaries, reinsurance intermediaries, and ancillary insurance intermediaries

• Institutions for occupational retirement provision

• Credit rating agencies

• Administrators of critical benchmarks

• Crowdfunding service providers

• Securitization repositories

This comprehensive scope ensures that DORA embeds operational resilience across the EU financial sector, bolstering its defense against cyberattacks and systemic ICT disruptions.

Smaller Financial Entities: A Tailored Approach

One of the standout features of DORA is its nuanced approach to compliance requirements, particularly for smaller financial entities. These entities, such as small and non-interconnected investment firms, and certain small payment institutions, enjoy a more streamlined compliance path.

Smaller financial entities are subject to a “simplified ICT risk management framework,” detailed in DORA’s Article 16 and the corresponding technical standards outlined in CDR 2024-1774. This framework reduces the regulatory burden on these organizations, allowing them to meet essential resilience standards without the full breadth of obligations imposed on larger, more complex institutions. However, while ICT risk management requirements are simplified, smaller entities must still comply with DORA's other essential provisions.

ICT Third-Party Service Providers: Meeting Elevated Standards

DORA’s impact extends beyond financial entities to include third-party ICT service providers that play a critical role in maintaining the operational infrastructure of the financial sector. Under Chapter V of DORA, ICT third-party service providers are subject to stringent risk management and security requirements, including mandatory contractual obligations with their financial clients.

For third-party providers deemed critical to the financial system, the regulatory bar is set even higher. These providers face more rigorous scrutiny, including mandatory audits and regulatory oversight, to ensure that they meet the necessary resilience standards. This reflects DORA’s recognition of the growing importance of external ICT services in the financial sector’s operational continuity.

Preparing for DORA Compliance: Where to Begin

Whether you are a financial entity or an ICT service provider, preparing for DORA compliance is no longer optional. Failure to meet DORA’s requirements can expose your organization to significant operational, legal, and reputational risks.

To navigate this complex regulatory landscape, organizations must take a proactive approach. This involves not only educating employees about DORA’s requirements but also implementing a comprehensive ICT risk management strategy that is aligned with the regulation’s standards. For smaller financial entities and non-critical ICT providers, it is vital to understand the nuances of the simplified frameworks to avoid unnecessary regulatory strain.

How Regulativ.ai’s DORA Compliance Platform Can Help

As compliance becomes more demanding, automating your approach is key to efficiency and risk mitigation. Regulativ's DORA Compliance Platform provides an integrated solution designed to streamline the entire compliance process. Our platform assists your organization by:

• Providing templates and draft artefacts for all DORA policy requirements: If you are a young company and have little of the documentation required, this alone will save you hundreds of hours.  

• Automating the implementation of ICT risk management frameworks: Ensure your organization meets DORA's requirements with minimal manual intervention.

• Managing third-party risk: Keep track of third-party ICT service providers and ensure they adhere to DORA's stringent standards.

• Real-time reporting and monitoring: Access dynamic dashboards to monitor compliance and operational risks, ensuring your organization stays ahead of potential issues.

• Scalability and flexibility: The platform adjusts to meet the regulatory needs of both small entities and large financial institutions, providing tailored compliance pathways.

By leveraging Regulativ’s DORA platform, you can ensure that your organization remains resilient, compliant, and ready to face the challenges of the modern financial landscape.

Take the next step towards robust operational resilience. To learn more about how Regulativ can help your organization achieve seamless DORA compliance, visit www.regulativ.ai/dora.

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