What is the DORA Principle? Fundamentals of Digital Operational Resilience
Introduction
In 2023, the Digital Operational Resilience Act (DORA) came into force with the aim of strengthening the operational resilience of the financial sectors in the European Union. The timeliness and urgency of these regulations are undeniable, as demonstrated by BaFin in the third quarter of 2025 when it imposed its first DORA-related fine of 450,000 EUR. The violation: insufficient documentation of ICT third-party risks.
This case illustrates the consequences of non-compliance. Why is this particularly significant for financial service providers in Europe? Because the DORA fundamentals establish the digital operational resilience that is essential for the integrity, availability, confidentiality, and performance of critical financial systems. The stakes are high: the risks include hefty fines, audit failures, operational disruptions, and damage to the institution's reputation.
In this lead article, we will dive deep into the DORA principle, its significance, and the challenges you face. We provide insights into the fundamentals of digital operational resilience and offer practical advice to master the evolving requirements.
The Core Problem
Beyond the surface description of the DORA principle lies the core issue: the true costs of ignoring this regulation. We calculate the actual losses in euros, the wasted time, the risk exposure, and the things that most organizations get wrong.
The Digital Operational Resilience Act (DORA) sets clear requirements for the ICT risk management practices of companies in the financial sector. Article 5 of the regulation requires companies to have an adequate risk management system that considers the risks arising from the use of third-party services. Article 16 mandates a proper assessment of the impact of ICT infrastructures on business continuity and emergency plans.
Considering the estimated 2.1 billion euros lost annually due to cyber risks in Europe, the enormous economic significance of DORA becomes evident. Companies that fail to meet the requirements of this regulation not only jeopardize their financial performance but also the trust on which their customers and partners rely.
The widespread assumption that compliance is merely a bureaucratic step obscures the real danger posed by ignoring the DORA principles. A lack of transparency regarding the management of third-party risks, for example, can lead to serious security gaps that threaten the integrity and availability of critical systems.
It is about more than just financial sanctions. Non-compliant organizations are also exposed to increased operational disruption, which can lead to loss of customer trust and potentially an increase in market turbulence. All of this occurs against a backdrop where consumers demand evidence of security and compliance more than ever.
Why This Is Urgent Now
Recent regulatory changes and enforcement actions regarding laws like DORA have brought the urgency of implementing digital operational resilience to the forefront. The financial sector in Europe thus faces the challenge of quickly adapting its approach to combating risks – otherwise, it risks falling behind in competitiveness.
Market pressure is increasing as customers increasingly demand certifications and compliance attestations. Companies that fail to keep up with the requirements find themselves at a competitive disadvantage. Studies indicate that more than 50% of financial service providers struggle to meet the latest security requirements, directly impacting their ability to maintain customer trust and implement new business models.
The gap between where most organizations stand and where they need to be to comply with DORA is significant. Moreover, the consequences of failing to consider these requirements are more severe than ever. In an industry reliant on technology and digital connectivity, a lack of robust resilience strategies can quickly lead to catastrophic outcomes.
The urgency arising from these factors cannot be overlooked. The financial sector must adapt quickly and revise its compliance strategies to meet DORA requirements while maintaining the trust of customers and regulators. It is time to take the fundamentals of digital operational resilience seriously and take the necessary steps to leverage the full potential of the DORA principles for your organization. In the next part of the article, we will take a closer look at how you can do this.
What is the DORA Principle? Fundamentals of Digital Operational Resilience
In the first part of this discussion on the fundamentals of digital operational resilience according to the DORA principle, we explored the significance and context of DORA for financial service providers in Europe. In this second part, we would like to take a closer look at the practical implementation of this principle and present you with a framework to tackle the challenges of DORA.
The Framework
It is important to adopt a step-by-step approach to effectively address the requirements of DORA. First, your organization should analyze the specific requirements of DORA and the relevant articles of the regulation, particularly Article 4, which establishes the principles of digital operational resilience. Here are some actionable recommendations with specific implementation details:
Identify critical technologies and services: You need to identify the systems and services that are critical for the continuity and stability of your financial services. This should be done in accordance with DORA Art. 4(1).
Risk analysis and assessment: A detailed risk analysis is required to assess the potential impacts of disruptions in these critical technologies and services and to develop prioritized measures to mitigate these risks.
Develop a framework for technology and service selection: According to DORA Art. 4(3), you should develop criteria for selecting third-party providers and technologies that meet the requirements of digital operational resilience.
Monitoring and auditing: Regular monitoring and assessment of compliance with DORA requirements is necessary. This also includes conducting audits in accordance with DORA Art. 21.
"Looking good" in relation to DORA means that all these steps are not only implemented but also continuously monitored and adjusted to meet the ever-changing environmental conditions. "Just meeting the minimum" would mean that your organization meets the minimum requirements but may not adequately respond to risks or adjust its measures to changing threats.
Common Mistakes to Avoid
There are some common mistakes organizations make when dealing with DORA that stem from underestimating the significance or impact of the regulations:
Insufficient risk assessment: Many organizations begin to view regulations like DORA as a hurdle rather than as guidance for identifying and mitigating risks. This often leads to superficial risk assessments that do not adequately consider the potential impacts, as required by DORA Art. 4(2).
Excessive reliance on manual processes: Manually creating and monitoring ICT risks can be inefficient and error-prone. This can lead to important aspects of digital operational resilience being overlooked.
Insufficient integration of compliance into strategic decisions: Compliance should be an integral part of strategic decisions, not just a checkbox for regulatory reviews. Without genuine integration of compliance into the strategic process, it becomes difficult to effectively implement DORA requirements.
Instead of making these mistakes, your organization should strategically invest in developing compliance frameworks and technologies that enable automated risk processing and promote the integration of compliance into strategic decisions.
Tools and Approaches
While there are various approaches to implementing DORA, we would like to discuss the main variants here and their advantages and disadvantages:
Manual approaches: Manual collection and monitoring of risks have the advantage of flexibility and adaptation to the specific context of an organization. However, they are time-consuming, error-prone, and can quickly become unmanageable when implementing DORA requirements.
Spreadsheet/GRC approaches: Using spreadsheets and Governance, Risk and Compliance (GRC) tools can facilitate the management of processes. However, they often have limited functionalities for monitoring and analyzing risks and may be insufficient in meeting DORA requirements, particularly regarding continuous monitoring and evidence collection.
Automated compliance platforms: Automated compliance platforms like Matproof offer a more efficient and scalable way to meet DORA requirements. They enable the generation of compliance policies, the collection of evidence from cloud providers, and the monitoring of endpoints. These platforms are ideal for managing the complexity of DORA requirements and ensuring continuous monitoring and reporting.
Matproof is one such compliance automation platform specifically designed for the requirements of DORA, SOC 2, ISO 27001, GDPR, NIS2, and other European financial services regulations. It offers AI-driven policy creation in German and English, automated evidence collection from cloud providers, and an endpoint compliance agent for monitoring devices. Matproof also provides 100% data residency rights in the EU and is hosted in Germany.
Honestly, automation helps, especially in managing processes more efficiently and collecting evidence, but it does not replace the need for fundamental compliance strategies and the integration of compliance into the overall business strategy. Automated tools like Matproof are therefore a valuable aid, but they are not a substitute for solid compliance knowledge and decision-making.
Getting Started: Your Next Steps
To quickly begin implementing the DORA principle for digital operational resilience, we have put together a concrete five-step plan that you can start implementing this week:
Familiarize yourself with the basic concept of DORA: Read the official publications from the EU and BaFin on digital operational resilience to gain a solid understanding of the requirements.
Assess your current compliance structures: Review which aspects of your IT security and compliance strategy already align with the DORA principles and which areas need improvement.
Prioritize your efforts: Determine which areas require the most urgent attention and focus your resources accordingly.
Create a cross-functional team: Collaboration between compliance, IT, and business units is crucial for effectively implementing DORA.
Begin implementation: Get started by taking the necessary technical and organizational measures required to meet DORA requirements.
Resource recommendations:
- The official publications from the European Commission and BaFin are essential here: "Digital Operational Resilience Act (DORA)" and the BaFin guidelines on information security.
- For advanced implementation questions, the recommendations from the European Union Agency for Cybersecurity (ENISA) are also useful.
You should consider seeking external help if you are in the planning phase and do not have enough internal expertise to tackle the technical and organizational challenges. A quick win that you can achieve in the next 24 hours is to initiate a meeting with your key stakeholders to discuss the necessity and scope of DORA implementation and to set priorities together.
Frequently Asked Questions
Question 1: How much time do I have to become DORA compliant?
Answer: DORA will be implemented into national law over the coming years, but the exact deadlines vary by member state. It is advisable to start early to avoid surprises and ensure a smooth transition. Consider the implementation phases and plan your compliance measures accordingly.
Question 2: Are there specific DORA training or certifications that my team and I should complete?
Answer: Although there are currently no specific DORA certifications, it may be helpful to further educate yourself on the underlying topics such as information security, risk management, and compliance. You should stay updated on developments regarding DORA.
Question 3: Can I rely on my existing compliance tools and frameworks to become DORA compliant?
Answer: Yes, existing tools and frameworks can assist in implementing DORA but may need to be adjusted or expanded. It is important to carefully align the requirements of DORA with your current compliance measures and upgrade or update them as necessary.
Question 4: How can I ensure that my cloud providers are DORA compliant?
Answer: Request detailed information from your cloud providers about their compliance measures and the implementation of DORA requirements. You should also review and, if necessary, adjust their service agreements to ensure compliance with DORA requirements.
Question 5: What role does collaboration between different departments play in implementing DORA?
Answer: Collaboration is crucial. Compliance, IT, risk management, and business units must work together to develop and implement a holistic DORA strategy. This includes jointly identifying risks, developing mitigation measures, and continuously monitoring and assessing the effectiveness of these measures.
Key Takeaways
In this article, we have outlined the fundamentals of digital operational resilience according to the DORA principle and emphasized its significance for your financial institution. The main points are:
- The DORA principle requires a holistic and proactive approach to IT security and compliance.
- It is crucial to start preparing for DORA early to meet legal and technical requirements.
- Interdisciplinary collaboration and a focused approach to key compliance and security aspects are essential for success.
As the next step, you should consider the recommendations mentioned above and begin implementation. Matproof can help you automate these processes, thereby increasing the efficiency and effectiveness of your compliance measures. For more information and a free assessment, visit https://matproof.com/contact.