DORA Compliance Checklist: Everything Financial Services Need in 2026

Introduction

Per the Digital Operational Resilience Act (DORA), financial entities are required to demonstrate a robust ICT risk management framework. Article 6(1) of DORA explicitly states this requirement, yet many financial entities in Europe treat it as a mere checkbox exercise. This approach is not only insufficient; it is outright dangerous. Compliance with DORA, which is slated to come into full effect in 2026, is not a matter of ticking boxes but of fundamentally improving operational resilience. Failure to properly understand and implement DORA requirements can lead to heavy financial penalties, audit failures, operational disruption, and irreparable damage to organizational reputation. This article seeks to unravel the complexities of DORA compliance and provide a checklist that financial services in Europe must adhere to in order to navigate the regulatory landscape successfully.

For European financial services, compliance with DORA is not just a regulatory imperative but a competitive necessity. The stakes are high: non-compliance can lead to fines of up to 2% of total annual turnover or EUR 10 million, whichever is higher, as per Article 44(5) of DORA. Moreover, the operational risks are not just financial; they include potential disruptions in service, loss of customer trust, and reputational damage that can have long-lasting effects on an entity's standing in the market.

The Core Problem

Despite the clear requirements of DORA, many financial entities in Europe are still taking a surface-level approach to compliance. They see the act as just another box to tick, rather than as an opportunity to strengthen their operational resilience and safeguard their digital operations. This approach not only puts them at risk of regulatory penalties but also exposes them to significant operational risks.

The real costs of this approach are substantial. For instance, a financial institution that fails to properly implement DORA's ICT risk management framework may face operational disruptions that could cost them millions in lost revenue. The wasted time spent on ineffective compliance efforts can be better invested in strengthening their digital resilience. Moreover, the risk exposure due to suboptimal compliance can lead to financial losses, damage to customer relationships, and potential legal repercussions.

Most organizations misunderstand the scope of DORA's requirements. They focus on meeting the minimum standards set by the act, rather than striving for excellence in their ICT risk management practices. This misunderstanding leads them to overlook key aspects of the act, such as the requirement to have a comprehensive incident management plan in place, as stipulated in Article 14(1) of DORA. By not properly implementing this requirement, organizations expose themselves to significant risks during incidents, including potential financial losses and reputational damage.

Why This Is Urgent Now

The urgency of proper DORA compliance has been underscored by recent regulatory changes and enforcement actions. As regulators continue to ramp up their enforcement efforts, financial entities that fail to comply with DORA's requirements risk facing severe penalties. Moreover, as market pressure mounts, customers are increasingly demanding proof of compliance with robust operational resilience frameworks like DORA. This demand is further fueled by the competitive disadvantage faced by non-compliant organizations, as their inability to demonstrate operational resilience can lead to a loss of customer trust and market share.

The gap between where most organizations are and where they need to be in terms of DORA compliance is significant. Many are still operating under outdated risk management frameworks that do not meet the requirements of DORA. By not updating their practices to align with the act's requirements, these organizations are putting themselves at risk of regulatory penalties and operational disruptions.

In conclusion, proper DORA compliance is not just a regulatory obligation but a critical aspect of operational resilience for financial entities in Europe. The costs of non-compliance are high, and the risks are significant. In the face of increasing regulatory scrutiny and market pressure, organizations that do not take DORA compliance seriously risk falling behind their competitors and suffering severe consequences. In the next part of this series, we will delve deeper into the specific requirements of DORA and provide a detailed checklist that financial services in Europe must adhere to in order to achieve compliance and enhance their operational resilience.

The Solution Framework

In the face of the complex and evolving landscape of DORA compliance, a structured and systematic approach is crucial. The key is to build a solution framework that not only meets the immediate requirements of DORA but is also adaptable for future changes. Here are the steps financial entities need to follow:

1. Establish a Robust ICT Risk Management Framework: As stated in Article 6(1) of DORA, the ICT risk management framework must be comprehensive and not merely a checkbox exercise. Good practice means aligning with the principles in DORA Article 23, where ICT risk management processes should be designed to identify, prevent, and mitigate risks to operational resilience.

2. Continuous Assessment and Monitoring: DORA Article 21 mandates continuous monitoring and assessment of ICT risk. This should be an ongoing process, not a one-time check. A good process involves identifying vulnerabilities, assessing the impact, and applying risk mitigation measures.

3. Periodic Reporting and Audits: Implement a system that ensures compliance with DORA Article 24, where periodic reporting and audits are required. This can be achieved by maintaining a detailed log of all risk assessments, mitigation actions, and monitoring activities.

4. Capacity and Preparedness Planning: A robust plan outlined in Article 25 should be developed and tested regularly. The capacity and preparedness plan should cover both the technical resilience of ICT systems and the ability of the organization to respond to disruptions.

5. Incident Reporting and Response: Based on Article 26 of DORA, there should be clear protocols for reporting ICT incidents and an effective incident response plan in place. This involves communicating with relevant authorities and stakeholders promptly.

"Good" compliance is not just about meeting the minimum requirements. It’s about understanding the spirit of the regulations and creating a resilient framework that can adapt to new challenges. In contrast, "just passing" means narrowly meeting the letter of the law, which often fails during audits due to the lack of depth in understanding and implementation.

Common Mistakes to Avoid

1. Lack of Comprehensive Assessment: Many organizations start with a superficial risk assessment, missing critical vulnerabilities. What they do wrong is failing to involve all relevant stakeholders and departments in the risk identification process. Instead, they should conduct a thorough assessment that includes IT, operations, compliance, and risk management teams.

2. Inadequate Documentation: A common oversight is insufficient documentation of risk assessments and mitigation plans. This fails audits as per Article 24 of DORA, which emphasizes the importance of records. Instead, maintain detailed documentation that includes the methodology, findings, and mitigation strategies.

3. Neglecting Continuous Monitoring: Organizations often see monitoring as a periodic task rather than a continuous process. This approach fails to meet the requirements in Article 21 of DORA. Instead, implement a system that provides real-time monitoring and alerts for any deviation from the risk management plan.

4. Lack of Incident Response Plan: Some companies neglect to develop a comprehensive incident response plan as required by Article 26. They often fail to consider the communication and reporting protocols. Instead, create a detailed plan that outlines the steps to be taken during an incident, including communication with relevant authorities and stakeholders.

Tools and Approaches

The manual approach to DORA compliance, while it can be thorough, is also time-consuming and prone to human error. It works well for small-scale operations or during the initial stages of compliance but quickly becomes unsustainable for larger organizations.

Spreadsheet-based GRC (Governance, Risk, and Compliance) tools are a step up from manual methods, offering better organization and tracking of compliance activities. However, they have limitations in terms of real-time monitoring and automated evidence collection, which are essential for DORA compliance.

Automated compliance platforms offer significant advantages, such as real-time monitoring, automated evidence collection, and AI-powered policy generation. When choosing such a platform, look for features like 100% EU data residency, as required by GDPR, and the ability to generate policies in German and English, which is beneficial for multinational operations.

Matproof, for instance, is a compliance automation platform built specifically for EU financial services. It offers AI-powered policy generation in German and English, automated evidence collection from cloud providers, and an endpoint compliance agent for device monitoring. It also provides 100% EU data residency, ensuring compliance with GDPR.

Automation is particularly helpful in reducing the time for audit preparation, from weeks to days, and in maintaining consistent compliance across all departments. However, it's important to remember that automation is not a silver bullet. It should be part of a larger compliance strategy that includes regular audits, staff training, and updates as regulations evolve.

Getting Started: Your Next Steps

To meet the DORA compliance checklist's demands, follow this five-step action plan:

1. Understand Your Obligations: Begin by thoroughly reviewing Article 6(1) of DORA, focusing on the ICT risk management framework. The European Banking Authority provides detailed guidelines on the interpretation of DORA's Articles.

2. Conduct an ICT Risk Assessment: Identify potential threats to your digital systems and the measures you currently have in place to mitigate those threats. This should be a detailed process, not just a checkbox exercise.

3. Develop Your Framework: Based on your risk assessment, develop a robust ICT risk management framework. Remember, it must include risk identification, mitigation strategies, and regular reviews.

4. Training and Awareness: Implement training programs for your staff. As per DORA Art. 6(1), they must understand their roles and responsibilities within the framework.

5. Seek External Help: If you lack the expertise or resources to handle DORA compliance in-house, seek external help. Financial services firms often require specialized assistance to navigate the complexities of such regulations.

A quick win you can achieve within the next 24 hours? Conduct an initial review of your current ICT risk management practices against DORA's requirements. Identify immediate gaps and start planning how to address them.

Frequently Asked Questions

Q: How often should we review and update our ICT risk management framework?

A: Per DORA Art. 6(1), reviews should be conducted at least annually or whenever there is a significant change in the risk profile of the institution. This ensures the framework remains effective and adaptable.

Q: What are the consequences of non-compliance with DORA?

A: Non-compliance can lead to hefty fines, as stated in DORA Art. 40. More importantly, it can erode trust, damage reputation, and lead to operational disruptions.

Q: How can we ensure our ICT risk management framework is effective?

A: An effective framework includes a comprehensive risk assessment, clear policies, effective controls, and regular testing and reviews. It also requires active participation from all levels of the organization.

Q: Is it necessary to involve third-party providers in our ICT risk management framework?

A: Yes, DORA Art. 25 emphasizes the importance of managing risks associated with third-party providers. This includes assessing their resilience, establishing controls, and monitoring their performance.

Q: How can we demonstrate compliance to regulators?

A: Maintain detailed documentation of your risk management processes, including risk assessments, control measures, and review outcomes. Regularly update this documentation to reflect any changes or improvements.

Key Takeaways

• DORA's ICT risk management requirements are not just checkboxes; they demand a comprehensive and proactive approach.
• Regular reviews and updates of your ICT risk management framework are crucial, as is staff training.
• Compliance is not just about avoiding fines; it's about maintaining trust and operational stability.
• Consider leveraging external expertise to ensure your framework meets DORA's standards.
• Matproof can assist in automating these compliance tasks, ensuring they are both efficient and effective. For a free assessment of your current framework against DORA's requirements, visit https://matproof.com/contact.