By Libero Raspa  

Financial institutions are at the forefront of a rapidly evolving digital landscape, where cyberattacks, data breaches, and IT failures are becoming increasingly severe and unpredictable.  

The European Union’s Digital Operational Resilience Act (DORA) aims to address these challenges by establishing a unified framework for digital operational resilience within the EU’s financial sector. This regulatory framework is designed to ensure that financial entities are equipped to handle the varieties of risks they face in today’s technology-driven environment.  

DORA applies to a wide range of financial organisations, including banks, payment institutions, insurance companies, and critical third-party service providers. It mandates extensive measures to ensure these institutions can withstand, respond to, and recover from all types of ICT-related disruptions.  

However, as regulations like DORA emerge, it is evident that compliance alone is not enough. Financial institutions must embed digital resilience into their operations, ensuring they can survive disruptions and gain a competitive advantage in a world where digital threats are becoming the norm.  

A New Imperative for Financial Institutions  

In this digital-first world, financial institutions are confronted with escalating risks that require a fundamental shift in approach. Building digital resilience is no longer optional, it is essential for business survival. While regulations like DORA emphasise the importance of ICT risk management and security incident management, providing a proactive framework to strengthen financial systems, the real challenge lies in creating systems that are capable of enduring and recovering from inevitable disruptions.  

DORA’s significance lies in its comprehensive approach to ensuring operational resilience, enforcing strict controls and continuous monitoring to mitigate cyber risks. This proactive approach encourages businesses to identify vulnerabilities before they are exploited, integrating resilience into their operational strategies. By enhancing efficiency and reducing the likelihood of costly disruptions, financial institutions can better safeguard their assets and reputation. 

The Real Cost of Cyber Disruptions 

Cyberattacks, data breaches, and IT failures can have substantial financial and reputational impacts on financial institutions. Ignoring the need for digital resilience poses a serious risk, leading to disruptions that can threaten long-term business viability. 

For instance, the recent breach at Evolve Bank & Trust impacted over 7.6 million customers, highlighting how a single data breach can have widespread consequences across the financial ecosystem. This underscores the importance of addressing cyber vulnerabilities, making it a pressing concern for banks, FinTech companies, and businesses alike.  

Moreover, in other recent news, hackers gained unauthorised access to dozens of HubSpot accounts. Although this breach was smaller in scale, the reality that many people reuse passwords across accounts means that even a single, targeted breach can trigger extensive and far-reaching consequences. 

When a data breach occurs, sensitive information—such as account numbers, personal identification numbers (PINs), usernames, and passwords—are exposed. In the realms of FinTech and banking, this often includes critical financial data, transaction histories, and personal identification details, amplifying the urgency for robust security measures.  

Given these significant financial risks, non-compliance with the Digital Operational Resilience Act (DORA) can result in substantial fines and reputational damage.  

Therefore, it is imperative for financial institutions to adhere to the regulations to maintain trust with clients, partners, and regulators. However, compliance alone is insufficient, financial institutions must adopt a proactive and resilient approach to safeguard against the unpredictable nature of cyber threats. 

Turning Risk into a Competitive Edge with AI  

For financial institutions to effectively protect themselves from constant threats, AI-driven solutions like adesso’s Compl.AI, which streamline compliance with DORA. Compl.AI automates compliance management and provides real-time monitoring and reporting of contracts with ICT third-party service providers, making it easier to manage third-party risks effectively.  

This powerful tool analyses contracts to ensure that stakeholders meet stringent information security requirements, promoting a proactive risk management strategy that saves valuable time and significantly reduces human error.  

By utilising advanced GenAI technology and the expertise of adesso’s DORA specialists, Compl.AI quickly conducts automated gap analyses, clearly indicating whether requirements are fully, partially, or not met, complete with clear references.  

By relieving banks and insurance companies of the burden of managing numerous contracts, it effectively eliminates the need for extensive manual checks or costly external reviews. Furthermore, it helps institutions re-examine contracts and make necessary adjustments when regulatory requirements change, ensuring ongoing compliance and enhanced IT resilience under DORA. This comprehensive approach not only safeguards assets but also empowers institutions to respond quickly to emerging threats in a rapidly evolving digital landscape. 

Conclusion 

The Digital Operational Resilience Act signifies a critical shift in how financial institutions approach cybersecurity and operational resilience. Compliance is vital, not just for avoiding penalties, but for ensuring long-term security and stability in the financial sector.  

Tools like Compl.AI support proactive risk management, enabling institutions to navigate an increasingly complex regulatory environment efficiently. 

In a landscape filled with unpredictable threats, financial institutions must view digital resilience as essential, not merely as a regulatory obligation. By adopting AI-driven solutions and prioritising resilience, they can protect against disruptions and prepare for future growth, ultimately fostering a safer, more resilient digital future. As the financial sector continues to evolve, the integration of technology and regulatory compliance will play a pivotal role in shaping its landscape, ensuring institutions can thrive amidst the challenges ahead.

About the Author

Libero Raspa was appointed Managing Director of adesso UK in March 2023. He has a Master’s in Software and Computer Engineering and an Executive MBA. Previously, he led Europe Sales Strategy & Operations for a Booking Holdings company and worked as a Delivery Manager at IBM.