Preamble 1 to 10, Digital Operational Resilience Act (DORA)
Delve into the Digital Operational Resilience Act (DORA) as it lays out a comprehensive framework to bolster operational resilience and standardized risk management across Europe’s financial sector. DORA addresses the evolving risks and dependencies associated with ICT services, emphasizing regulatory consistency, effective incident management, and enhanced governance to create a resilient financial environment.
Preamble 1
The digital transformation of the financial sector brings substantial benefits, yet it also heightens the risks linked to information and communication technologies (ICT). Recognizing these challenges, the European Union (EU) requires a robust framework to strengthen the financial sector's resilience against ICT-related crises.
Preamble 2
The rapid advancement of ICT services, coupled with the increasing reliance of financial entities on these services, underscores the need for comprehensive ICT risk management. Ensuring the operational resilience of the financial sector is essential to maintain the continuity of critical financial services.
Preamble 3
While existing EU legislation addresses certain aspects of ICT risk management, a more unified and coordinated approach is necessary. DORA seeks to bridge these gaps by establishing a thorough framework for managing ICT risks within the financial sector.
Preamble 4
Building on existing laws like the Network and Information Systems (NIS) Directive, DORA aims to create a more cohesive approach to ICT risk management. The act ensures that financial entities are prepared to withstand, respond to, and recover from ICT-related disruptions.
Preamble 5
The interconnected nature of the financial sector means that an ICT-related incident affecting one entity can have widespread repercussions. DORA seeks to fortify the entire sector’s operational resilience by setting common standards and requirements.
Preamble 6
Financial entities must adopt a proactive stance on ICT risk management, encompassing risk assessment, mitigation, effective controls, and continuous monitoring. DORA underscores the need for a strong governance framework to manage ICT risks effectively.
Preamble 7
Outsourcing and reliance on external ICT services are prevalent in the financial industry. DORA addresses the necessity for financial entities to manage ICT risks related to third-party service providers, ensuring they maintain a high level of operational resilience.
Preamble 8
The legislation acknowledges the crucial role of supervisory authorities in overseeing ICT risk management frameworks. It calls for collaboration and information sharing among national and European supervisory bodies.
Preamble 9
DORA aims to create a level playing field by standardizing ICT risk management regulations across the European Union. This will help reduce regulatory fragmentation and ensure consistent adherence to standards by all financial entities.
Preamble 10
Incident reporting and learning from past incidents are central to DORA. Financial entities are required to implement effective mechanisms for reporting ICT-related incidents and analyzing their causes to prevent future occurrences.
Financial entities operating internationally or holding multiple licenses, such as banking, investment firm, and payment institution licenses across various Member States, face significant operational challenges. They must independently manage ICT risks and mitigate the impacts of ICT incidents, striving for consistency and cost-effectiveness in their approach.
