Why UK Companies Need to Prepare For The EU's DORA

Businesses of all shapes and sizes have to stay on their toes when it comes to cyber security and protecting the ongoing operations, revenue, reputation of their company. A significant shift on the horizon is the EU's Digital Operational Resilience Act (DORA), set to come into effect in January 2025. 

While this is an EU regulation, its implications reach beyond European Union borders, meaning some UK companies will also need to comply.

What is DORA?

So, what exactly is DORA all about? Essentially, it's designed to strengthen the resilience of financial institutions against operational disruptions, particularly those related to Information and Communications Technology (ICT) risks. 

Think cyberattacks, system failures, and issues arising from third-party ICT providers. DORA aims to ensure that financial institutions can withstand and recover from any unexpected bumps in the road, keeping services, markets, and customers’ data safe and secure.

Why Does DORA Matter to UK Companies?

Even though the UK is no longer a member of the EU, many UK companies still have strong ties to the European market. If your business operates within the EU, offers services to clients based in the EU, or relies on ICT providers serving the EU financial sector, you’ll likely need to pay attention to DORA. 

The act has been put in place to create a uniform approach to operational resilience across financial institutions, meaning that UK businesses involved in these markets will need to align their practices with EU standards.

Now, you might be thinking, “But what if I don’t fall under the umbrella of DORA?” Well, it’s worth noting that ignoring these changes could come back to bite you.

What Happens if UK Companies Don't Comply?

Not following DORA can lead to some pretty serious repercussions. For starters, you might face financial penalties, with hefty fines waiting for those who fail to meet the requirements. That can hit hard, especially for smaller businesses.

Then there’s reputational damage. Non-compliance can seriously erode customer trust, and let’s be honest, in today’s digital world, trust is everything. If your clients think you aren’t keeping their data safe, they’re likely to look elsewhere.

Additionally, EU clients might sever ties with UK companies that don’t follow DORA. This could have a massive impact on your market access and revenue streams. You don’t want to lose clients just because you weren’t keeping up with regulations, right?

Finally, there’s the increased cyber risk to consider. If you fail to implement DORA's security measures, and the best practice it talks to, you’re potentially leaving your business open to cyberattacks that could have been protected against. This could lead to data breaches, financial losses, and operational disruptions. It’s a domino effect that can be difficult to recover from, and difficult to defend in the ‘court of the reasonable person’.

What Should UK Companies Do?

While January 2025 may seem like ages away, preparing for DORA requires time and effort. It’s a good idea to start thinking about what needs to be done. First, assess your current cybersecurity posture. A thorough gap analysis can help you identify areas where your current practices might fall short of DORA requirements.

Next, look closely at your ICT risk management framework. It’s important to integrate cybersecurity and operational resilience into your overall risk management strategy. Make sure you’re not just checking boxes; you want a system that genuinely protects your business.

Incident reporting and response capabilities should also be a priority. Establishing a system for identifying, reporting, and responding to major ICT incidents can save you a lot of headaches down the line.

Comply With DORA Standards

Don’t forget third-party risk management. Make sure that all your ICT providers are complying with DORA standards. If they’re not, their lack of compliance could reflect poorly on your business as well.

Regular testing of your ICT systems and operational resilience is vital. Think vulnerability assessments, penetration testing, and disaster recovery tests. Keeping everything in check helps ensure you’re always ready for whatever comes your way.

When it comes to cybersecurity measures, you want to have strong authentication, encryption, access controls, and threat detection tools in place. These can help safeguard your organisation and make it less attractive to cybercriminals.

Clear Governance 

Establishing clear governance and oversight is also important. Define roles and responsibilities for ICT risk management and ensure that senior management is involved. After all, if the big players in your company are invested in cybersecurity, it sets a positive tone for the rest of the organisation.

It’s crucial to allocate adequate resources. Investing in the necessary tools, technologies, and personnel to implement DORA-compliant measures will pay off in the long run.

Need Help?

DORA might seem daunting, and it’s completely understandable if you’re feeling a bit overwhelmed. The complexities can be tricky to navigate, but you don’t have to go it alone. Seeking help from cybersecurity experts can make a world of difference. They can help you understand the requirements, assess your current state, and develop a tailored plan to achieve compliance.

Taking action now can save you from future headaches and potential pitfalls. So why wait until it’s too late? If you want to start your journey towards DORA compliance, reach out to a trusted cybersecurity partner today.

Need some help? Get in touch with our team at Digital Oversight today.