Today marks just 100 days until the Digital Operational Resilience Act (DORA) takes effect on January 17, 2025. Financial institutions are racing to comply with the European Union (EU), and DORA will affect companies within the EU, and those working into the market from the outside. That means many UK finance companies will be affected, and the the signs are that many are lagging on compliance. But with 100 days to the DORA deadline, there’s time to see how act affects you and realise the benefits of achieving full compliance.
What is DORA all about?
With DORA, the EU aims to strengthen the overall stability and security of the financial system. The Act has been drawn up to enhance digital resilience, ensuring that institutions are better prepared to withstand cyberattacks, IT disruptions, and operational risk. To achieve this, the act puts a new emphasis on responsibility for ICT (Information and Communication Technology) infrastructure at board level and promotes information sharing between companies.
Dora’s scope covers financial entities, including:
- Banks and Credit Institutions
- Insurance and Reinsurance Companies
- Payment and E-Money Institutions
- Investment Firms
- Crypto-Asset Service Providers (CASPs)
- Central Securities Depositories (CSDs)
- Third-party ICT Service Providers (such as cloud computing and cybersecurity specialists
There are exemptions for very small enterprises (employing fewer than 10 people, with an annual turnover or a balance sheet of under EUR 2 million (approx. £1.7 million). However, any company with dealings or ambitions to work with finance entities or ICT providers in the EU should be aware of the act’s requirements.
The penalties for any non-compliance will vary as the act comes into force. However, the potential penalties could include operational restrictions or daily fines equalling up to 1% of annual turnover.
What are the benefits of early DORA compliance?
Instead of dwelling on the consequences of non-compliance, it’s a good time for companies to consider the benefits of gaining compliance before the deadline!
Even if a company isn’t currently working into the EU, there are strategic advantages to getting ahead of regulation.
1. Proactive Risk Management and Enhanced Security
Complying with DORA before the deadline enables companies to identify and address vulnerabilities in their systems well before any potential incidents. The regulation emphasises robust ICT risk management frameworks. That means any company that implemented the required measures can respond effectively to cyberattacks, data breaches, and system failures with confidence.
The ability to mitigate risk early means you can avoid costly incidents. In addition to safeguarding sensitive data, companies can proactively protect their balance sheet and reputation.
2. Improved Client and Stakeholder Confidence
Trust is everything in finance, and it is hard to earn it back should the worst happen. Proactive compliance with DORA proves that an organisation is serious about digital security and operational integrity to clients, stakeholders, and regulators.
DORA supports building trust, and the long-term positive impact can boost customer acquisition, relationships, and market reputation. Any firm that is slow to comply increases the risk of reputational damage as they are more exposed to avoidable disruption and cyber incidents.
Early compliance means seeing the benefit of increased confidence and reduced risk earlier.
3. Streamlined Transition and Reduced Last-Minute Pressure
Compliance with DORA means fully understanding a company’s ICT infrastructure. That means working with professionals to complete detailed assessments, technological updates, incident reporting frameworks, and third-party risk management.
Starting early means firms can take a measured and strategic approach to implementing changes, ensuring that all aspects of compliance are properly addressed without the stress of a looming deadline. With 100 days to go, companies should act now to access the best support before there’s a rush to comply.
DORA isn’t a project that can be rushed. Cutting corners, errors, or incomplete implementation can leave a company hugely exposed.
Start early to take full advantage of DORA, increase the chance of a successful implementation and reduce the risk of non-compliance.
4. Cost Efficiency
DORA compliance will likely require an initial investment in systems, processes, and personnel, but early compliance can also save money in the long run. Organisations that plan and act early can optimise their resources and avoid the rush of last-minute consulting fees, technology costs, and implementation mistakes.
If you wait until the deadline, you may face higher costs due to increased demand for compliance support services, IT solutions, and legal advice. Spreading out the costs before compliance is mandatory means you’ll see the cost benefits earlier.
5. Strengthened Regulatory Relationships
Regulatory authorities will scrutinise how well institutions have prepared for DORA, not least because market alignment will likely be just around the corner for UK companies. As UK authorities monitor the roll-out, getting ahead of the new standards is a massive benefit.
Early compliance can help you with smoother regulatory audits and better relationships with supervisory authorities.
6. Competitive Advantage
Compliance isn’t just about meeting legal requirements. Early compliance is a strategic business move that can set a business apart from competitors. Improved resilience is a key differentiator and will translate well to clients that prioritise digital resilience.
Becoming a leader in digital resilience is a competitive and marketing edge – it pays to stay ahead of regulation.
Final Thoughts: Seize the Opportunity
With 100 days remaining, the time to act is now. DORA isn’t just for ICT teams. It calls on top management to take direct responsibility for their company infrastructure.
Avoid penalties and open up considerable benefits to make sure your company doesn’t just protect itself but stays ahead of the competition. Don’t wait until the deadline. Start securing your future by downloading our exclusive whitepaper.
