Preamble 1 to 10, Digital Operational Resilience Act (DORA)
Explore the Digital Operational Resilience Act (DORA) by reading through its extensive preambles covering everything from theoretical concepts to real-world applications. Examine how DORA emphasizes operational resilience and standardized risk management throughout Europe to handle the changing risks and dependencies of ICT services in the financial sector. Examine the framework's objectives to improve coordination between regulatory authorities, reduce risks to third parties, and improve governance. Discover how DORA's efficient incident management and regulatory consistency support a robust financial environment.
Preamble 1
The digital revolution in the financial sector offers significant advantages but also amplifies risks associated with information and communication technologies (ICT). Taking note of these obstacles, the European Union (EU) needs a strong framework to increase the financial sector's resistance to ICT-related crises.
Preamble 2
The rapid evolution of ICT services and the increasing dependency of financial entities on these services necessitate robust ICT risk management. The financial sector's operational resilience is crucial to ensure the continuity of critical financial services.
Preamble 3
Existing EU legislation addresses some aspects of ICT risk management, but a more coherent and harmonized approach is required. DORA aims to fill these gaps by providing a comprehensive framework for managing ICT risks across the financial sector.
Preamble 4
DORA builds on existing legislation, such as the Network and Information Systems (NIS) Directive, to create a more integrated approach to ICT risk management. The act seeks to ensure that financial entities can withstand, respond to, and recover from ICT-related disruptions.
Preamble 5
The financial sector's interconnectedness means that an ICT-related incident in one entity can have a cascading effect. DORA aims to strengthen the operational resilience of the entire financial sector by setting common standards and requirements.
Preamble 6
Financial entities must adopt a proactive approach to ICT risk management, which includes assessing and mitigating risks, implementing effective controls, and ensuring continuous monitoring. DORA emphasizes the importance of a robust governance framework for ICT risk management.
Preamble 7
In the financial industry, outsourcing and using outside ICT services are typical practices. DORA addresses the need for financial entities to manage ICT risks related to third-party service providers, ensuring that they maintain a high level of operational resilience.
Preamble 8
The legislation acknowledges that supervisory agencies have a responsibility to supervise the use of ICT risk management frameworks. It outlines the need for cooperation and information sharing among national and European supervisory authorities.
Preamble 9
The goal of DORA is to level the playing field by standardizing ICT risk management regulations throughout the European Union. This will help reduce regulatory fragmentation and ensure that all financial entities adhere to the same standards.
Preamble 10
The act emphasizes the importance of incident reporting and learning from past incidents. Financial entities must have effective mechanisms in place to report ICT-related incidents and analyze their causes to prevent future occurrences.
Financial entities that operate internationally or hold multiple licenses (such as banking, investment firm, and payment institution licenses, each issued by different authorities across various Member States) encounter significant operational challenges. They must tackle ICT risks and mitigate the negative impacts of ICT incidents independently, striving for consistency and cost-effectiveness in their approach.