Supply Chain Security
The management of cybersecurity risks throughout the supply chain, including all third-party vendors, software providers, and service partners. Both DORA and NIS2 mandate supply chain security measures to protect against cascading failures and targeted attacks.
Supply chain security has emerged as a critical concern following high-profile incidents like the SolarWinds attack and Log4j vulnerability. Both DORA and NIS2 place significant emphasis on managing cybersecurity risks that arise through the technology supply chain.
DORA requires financial entities to maintain detailed registers of ICT third-party providers, assess concentration risk, and ensure contractual protections including audit rights and exit strategies. NIS2 similarly mandates that essential and important entities address supply chain risks in their cybersecurity measures.
Effective supply chain security involves vendor risk assessments, continuous monitoring of provider security postures, contractual security requirements, incident notification provisions, and regular review of the overall supply chain risk landscape. Organizations must balance the benefits of outsourcing with the risks of dependency on external providers.
Related Terms
Third-Party Risk Management
The process of identifying, assessing, and controlling risks arising from outsourcing to third-party service providers. Under DORA Article 28, financial entities must maintain a register of all ICT third-party providers and conduct thorough due diligence on critical providers.
Vendor Risk Assessment
A structured evaluation of the security posture and compliance status of third-party vendors before and during a business relationship. DORA Article 28 mandates specific due diligence requirements for ICT service providers used by financial entities.
DORA (Digital Operational Resilience Act)
An EU regulation that establishes uniform requirements for the security of network and information systems in the financial sector. DORA became mandatory on January 17, 2025, and applies to banks, insurance companies, investment firms, and their critical ICT service providers.
NIS2 (Network and Information Security Directive)
The updated EU directive on cybersecurity that expands the scope of the original NIS Directive to cover more sectors and entities. NIS2 introduces stricter security requirements, incident reporting obligations, and enforcement measures with significant penalties for non-compliance.
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