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The European Union’s Digital Operational Resilience Act (DORA) is set to revolutionize the financial services industry. By imposing stringent cybersecurity standards on both financial institutions and their technology providers, DORA aims to strengthen resilience against cyber threats and operational disruptions.
Regulation has been prompted by a series of high-profile cyberattacks that have exposed vulnerabilities in the financial sector. The 2020 CrowdStrike incident, which caused widespread disruptions at major banks and payment processors, underscored the urgent need for improved cybersecurity measures.
Under DORA, financial institutions must implement robust cybersecurity practices, including incident reporting, risk management, and third-party risk assessment. Technology providers, often overlooked in previous regulatory frameworks, are now firmly in the spotlight, with increased scrutiny of their security measures and their role in maintaining the stability of the financial system.
DORA compliance represents a significant challenge for both financial institutions and their technology partners. It requires substantial investments in technology, people, and processes. However, the long-term benefits of a more resilient financial system are expected to outweigh the costs.
As the January 2025 deadline approaches, the industry is racing to achieve compliance. Failure to do so could result in heavy fines and reputational damage. The financial services industry is entering a new era of cybersecurity, characterized by increased vigilance and collaboration between financial institutions and their technology providers.
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