DORA Compliance Guide for Financial Entities

What is DORA?

The Digital Operational Resilience Act (Regulation (EU) 2022/2554) is an EU regulation that standardizes how financial entities manage ICT (Information and Communication Technology) risks. Published on December 27, 2022, DORA applies from January 17, 2025.

DORA ensures that banks, insurers, investment firms, and their critical technology providers can withstand, respond to, and recover from ICT-related disruptions and cyber threats.

Who Must Comply with DORA?

Financial Entities (Article 2)

DORA applies to a broad range of financial institutions, including:

• Credit institutions (banks)

• Payment institutions and e-money institutions

• Investment firms and crypto-asset service providers

• Insurance and reinsurance undertakings

• Pension funds

• Trading venues and central counterparties

• Credit rating agencies

ICT Third-Party Service Providers

Critical ICT service providers (cloud platforms, data centers, managed security services) designated by EU authorities must also comply with DORA's oversight framework (Articles 28-30).

DORA's Five Pillars

1. ICT Risk Management (Articles 6-16)

You must establish a comprehensive ICT risk management framework that covers:

• Governance: Board and management oversight of ICT risks

• Protection: Security policies, access controls, encryption

• Detection: Continuous monitoring and threat intelligence

• Response and recovery: Incident management and business continuity plans

• Learning: Post-incident reviews and improvement cycles

Your framework must be documented, regularly reviewed, and proportionate to your organization's size and risk profile.

2. Incident Reporting (Articles 17-23)

DORA introduces strict timelines for reporting ICT-related incidents to competent authorities:

• Initial notification: Within 4 hours of classification as major

• Intermediate report: Within 72 hours with root cause analysis

• Final report: Within one month, including recovery measures

3. Digital Operational Resilience Testing (Articles 24-27)

You must conduct regular testing of your ICT systems and resilience capabilities:

• General testing: Vulnerability assessments, penetration testing, scenario-based tests

• Advanced testing: Threat-led penetration testing (TLPT) for entities identified by authorities

Testing frequency and scope depend on your risk profile, with TLPT required at least every three years for designated entities.

4. Third-Party ICT Risk Management (Articles 28-30)

DORA mandates comprehensive oversight of ICT third-party providers, including:

• Pre-contractual assessment: Due diligence on provider capabilities and risks

• Contractual requirements: Service levels, audit rights, exit strategies, subcontracting controls

• Ongoing monitoring: Performance tracking, compliance verification, concentration risk management

• Exit strategies: Plans to transition services without disruption

5. Information Sharing (Article 45)

Financial entities may participate in arrangements to share cyber threat intelligence and best practices. These arrangements must protect confidentiality and comply with data protection laws.

Implementation Roadmap

Step 1: Determine Your Scope

Confirm whether your organization falls under DORA. Review Article 2 to identify applicable entity types, and consult your national competent authority if uncertain.

Step 2: Conduct a Gap Analysis

Assess your current ICT risk management, incident response, testing, and third-party oversight practices against DORA's requirements. Identify gaps in policies, processes, documentation, and controls.

Step 3: Build or Update Your ICT Risk Management Framework

Develop comprehensive policies and procedures covering all five pillars. Ensure management and board-level governance is in place, and assign clear roles and responsibilities.

Step 4: Establish Incident Reporting Processes

Define incident classification criteria, reporting workflows, and escalation paths. Integrate with your existing incident management systems and train teams on DORA's strict timelines.

Step 5: Plan Your Testing Program

Schedule regular resilience tests (vulnerability scans, penetration tests, scenario exercises). If you're designated for TLPT, engage qualified testers and coordinate with authorities.

Step 6: Review Third-Party Arrangements

Inventory all ICT third-party providers. Review contracts to ensure they include DORA-compliant clauses (audit rights, exit provisions, subcontracting transparency). Assess concentration risk and develop mitigation strategies.

Step 7: Document Everything

DORA requires extensive documentation: risk registers, incident logs, test reports, contracts, and board minutes. Maintain audit-ready records to demonstrate compliance.

Step 8: Train Your Teams

Ensure IT, security, risk, compliance, and management teams understand DORA requirements and their responsibilities. Conduct regular training and simulations.

DORA and Other Frameworks

DORA complements and overlaps with other regulations and standards:

• NIS2 Directive: DORA addresses ICT resilience for financial entities, while NIS2 covers critical infrastructure across sectors. Financial entities under both must coordinate compliance.

• ISO 27001: DORA's risk management pillar aligns with ISO 27001 controls. An ISO 27001-certified ISMS can support DORA compliance but won't cover all requirements (e.g., incident reporting timelines).

• GDPR: DORA's incident reporting and third-party oversight must respect GDPR data protection and breach notification rules.

Map DORA requirements to your existing frameworks to avoid duplication and leverage prior work.

Common Challenges

Tight Incident Reporting Timelines

The 4-hour initial notification window is aggressive. Automate detection and classification where possible, and establish 24/7 incident response capabilities.

Third-Party Contract Renegotiation

Many legacy contracts lack DORA-compliant clauses. Start renegotiations early and prioritize critical providers.

TLPT Coordination

Advanced testing requires coordination with regulators and qualified testers. Plan well in advance if you're designated for TLPT.

Concentration Risk Management

Identifying and mitigating over-reliance on specific providers or technologies requires deep supply chain visibility. Conduct thorough dependency mapping.

Penalties for Non-Compliance

National competent authorities enforce DORA with penalties for violations, including:

• Fines up to 2% of annual worldwide turnover

• Public warnings and reputational damage

• Suspension of activities or withdrawal of authorization in severe cases

Penalties are proportionate to the severity and duration of non-compliance.

Accelerate DORA Compliance with ISMS Copilot

ISMS Copilot is an AI assistant purpose-built for compliance frameworks like DORA. It helps you:

• Conduct gap analyses: Upload your existing policies or risk assessments, and ask Copilot to identify gaps against DORA's five pillars.

• Generate compliant policies: Use pre-built prompts to create ICT risk management policies, incident classification procedures, and third-party risk frameworks aligned with DORA Articles 6, 17, and 28.

• Map to other frameworks: Query how DORA requirements relate to ISO 27001, NIS2, or NIST CSF to streamline multi-framework compliance.

• Prepare for audits: Generate checklists, evidence lists, and control mappings for regulatory inspections.

Example queries for ISMS Copilot:

• "Does DORA apply to my payment institution?"

• "Generate an ICT risk management policy for DORA Article 6."

• "What are the incident reporting timelines under DORA Article 19?"

• "Create a third-party risk assessment template for DORA Article 30."

ISMS Copilot draws on real-world consulting experience and official regulatory texts to provide accurate, audit-ready guidance—without the hallucinations common in general AI tools.

Explore the DORA compliance prompt library for ready-to-use templates, or learn how ISMS Copilot supports risk managers with DORA and NIS2.

Additional Resources

• Official DORA Regulation (EU) 2022/2554

• DORA Regulation Overview and Table of Contents

• DORA Compliance Prompt Library

• ISMS Copilot for Risk Managers in Regulated Industries (DORA/NIS2)