Digital Operational Resilience Act (DORA) Compliance through Vendor and Contract Management

Summary

In this video, the speaker discusses the Digital Operational Resilience Act (DORA), which comes into effect in January 2025 and focuses on supply chain resilience and cybersecurity within financial services. The video emphasizes vendor management and highlights key regulatory areas like governance, ICT risk management, incidents, third-party risks, and information sharing. The speaker explains how organizations can prepare by utilizing Vendor and Contract Lifecycle Management (VCLM) platforms, like Gatekeeper, to streamline vendor operations, manage risks, and ensure compliance. The video offers actionable insights for financial entities to tackle DORA’s requirements effectively.

Takeaways

• 😀 Dora (Digital Operational Resilience Act) focuses on enhancing digital resilience within financial services, particularly in the EU and UK.
• 😀 Dora comes into effect in January 2025, meaning organizations must be prepared by the end of Q4 2024.
• 😀 Dora emphasizes the importance of supply chain resilience and better protections against cyber risks, particularly within vendor management.
• 😀 Over 22,000 financial services entities are expected to fall under Dora's scope, making compliance a major task.
• 😀 The five main areas of Dora are governance, ICT risk management, ICT incidents and reporting, digital operational stability testing, and third-party risk management.
• 😀 Vendor and contract lifecycle management (VCLM) is a key approach for effectively managing compliance with Dora requirements.
• 😀 Contracts with third-party ICT service providers must include mandatory clauses like penetration testing, contingency plans, and security measures.
• 😀 Financial entities are required to maintain a register of ICT contracts and categorize vendors based on criticality.
• 😀 Critical third-party ICT service providers will be subject to EU oversight and must follow guidelines to mitigate ICT risks.
• 😀 Effective risk management, incident management, and operational resilience testing should be integrated into vendor relationships and contracts.
• 😀 Platforms like Gatekeeper support the management of vendor relationships and regulatory compliance, simplifying the process of meeting Dora requirements.

Q & A

What is DORA and when does it come into effect?

DORA (Digital Operational Resilience Act) is a regulation focused on enforcing supply chain resilience and better protections against cyber threats within financial services. It will come into effect in January 2025, which means organizations should prepare by the end of Q4 2024.

What are the main areas of focus for DORA?

The main areas of focus for DORA are governance, ICT (Information and Communication Technology) risk management, ICT incidents and reporting, digital operational stability testing, ICT third-party risk management, and information/intelligence sharing.

Why is DORA particularly important for financial services?

DORA is critical for financial services because it aims to enhance the resilience of digital operations and improve cybersecurity protections. It addresses the risks posed by outsourcing critical functions and ensures that vendors handle sensitive customer data appropriately.

What role does vendor management play in DORA compliance?

Vendor management plays a central role in DORA compliance, as financial services need to ensure their vendors meet specific resilience and cybersecurity standards. DORA requires detailed contract clauses, due diligence, and risk management processes for all third-party vendors providing ICT services.

What is the significance of vendor categorization under DORA?

Vendor categorization under DORA helps organizations distinguish between vendors that support critical functions and those that do not. This categorization is important for managing risks and ensuring that more stringent compliance measures are applied to vendors handling essential services.

How does DORA address ICT third-party service providers?

DORA requires that ICT third-party service providers, particularly those deemed critical, undergo oversight by the EU. These providers must implement risk management practices, and if they fail to comply with recommendations, financial entities could face consequences.

What steps must financial entities take regarding third-party risks and subcontracting?

Financial entities must document and manage risks related to third-party concentration, subcontracting, and outsourcing activities. This includes creating an effective risk management framework and incident management plan across the entire vendor base.

What role does incident management play in DORA compliance?

Incident management is a key component of DORA compliance. Financial entities must ensure that risks and incidents within their vendor supply chains are effectively managed, with clear processes in place to handle any issues that arise.

How can organizations use vendor lifecycle management (VCLM) to meet DORA requirements?

Organizations can use Vendor and Contract Lifecycle Management (VCLM) platforms to manage the entire vendor lifecycle, ensuring that all contracts, risks, and due diligence are properly documented. This helps streamline DORA compliance by offering a centralized approach to vendor management.

What are the recommended actions for organizations in preparing for DORA?

Organizations should start by categorizing their vendors, implementing rigorous vendor and contract lifecycle management, conducting operational resilience and security testing, and ensuring all critical vendor contracts include mandatory clauses that align with DORA requirements.