The Digital Operational Resilience Act (DORA)

The Digital Operational Resilience Act (DORA) is a new European regulation that aims to make financial institutions more resilient against IT disruptions. Since many banks, insurance companies, and investment firms use cloud services, DORA introduces rules to ensure their IT systems remain secure and reliable.

This blog post explains DORA in simple terms, how it affects financial companies using cloud providers, and what big cloud companies need to do to comply.

What is DORA?

DORA is a law that requires financial institutions to be prepared for IT failures, cyberattacks, and other technology-related risks. It covers five main areas:

  1. Managing IT Risks: Companies must have a solid plan to handle IT issues and ensure cloud infrastructure is secure.
  2. Reporting IT Incidents: If a major IT failure or cyberattack happens, companies must quickly report it to regulators.
  3. Testing Resilience: Companies must regularly test their IT systems to check how well they handle disruptions.
  4. Managing Third-Party Risks: Financial institutions need to ensure their cloud providers and other IT suppliers also follow strict security rules.
  5. Supervising Key IT Providers: Large cloud providers that work with banks will be monitored directly by European regulators.

What DORA Means for Financial Institutions Using Cloud Services

DORA makes it clear that financial companies must be careful when using cloud services.

Here’s what they need to do:

  • Ensure Compliance: Banks and insurers must check if their cloud providers follow DORA’s rules and have strict security measures in place.
  • Manage Vendor Risks: Companies must regularly review their cloud providers and have backup plans if something goes wrong.
  • Be Transparent: Financial institutions must document how they use cloud services and be ready to share that information with regulators.
  • Plan for Cloud Exits: If a cloud provider fails to meet security or compliance standards, companies must have an alternative provider ready.

Impact of DORA on Large Cloud Providers

Big cloud providers like AWS, Google Cloud, and Microsoft Azure will also have new responsibilities under DORA:

  • More Regulatory Oversight: Some cloud providers will be directly supervised by European regulators to ensure they meet strict standards.
  • Better Reporting: Cloud providers will need to be more transparent about security incidents and risks.
  • Stronger Security Measures: They must follow standardized security and resilience frameworks to support financial customers.
  • Closer Collaboration with Financial Firms: Cloud providers will need to offer solutions that help financial institutions meet DORA’s requirements.

How Financial Institutions Can Prepare for DORA

  1. Review Cloud Risks: Identify any weaknesses in current cloud setups and evaluate how providers handle security.
  2. Update Contracts: Make sure contracts with cloud providers include security and compliance terms required by DORA.
  3. Improve Incident Reporting: Set up clear procedures for detecting and reporting cloud-related issues.
  4. Plan Cloud Exits: Ensure there’s a strategy in place for moving workloads to another provider if needed.
  5. Talk to Regulators and Cloud Providers: Stay informed about expectations and best practices.

How meshcloud Can Help With DORA Compliance

Managing multiple cloud platforms while ensuring compliance can be challenging. That’s where meshStack comes in.

Our adopting meshStack helps financial institutions:

  • Manage Multi-Cloud Environments: Easily handle different cloud providers, each with its own security and compliance settings (landing zones).
  • Ensure Compliance with DORA: Automatically apply security and governance rules to cloud workloads.
  • Enable Flexible Cloud Strategies: Provide more cloud provider options, making it easier to switch services if needed.
  • Reduce Risk of Lock-In: Help financial institutions stay in control of their cloud usage, avoiding dependence on a single provider.

With meshStack, financial organizations can meet DORA’s requirements while keeping their cloud operations secure, flexible, and efficient.

Conclusion

DORA is a major step toward making financial institutions more resilient to IT risks. It affects both financial companies and their cloud providers, ensuring stricter security and transparency. At meshcloud, we help financial institutions navigate these challenges with our cloud governance platform, making it easier to stay compliant while benefiting from cloud innovation.

Want to learn more? Explore how meshStack helps financial institutions achieve compliance, security, and resilience in cloud environments. Contact us to discuss your cloud governance needs!