Compliance isn’t a chore; it's a strategic advantage that strengthens your foundation and enhances trust.
As organizations embrace innovation and operational efficiency, their digital ecosystems expand. It also amplifies exposure to growing cyber threats in scale and sophistication. Cybercrime has risen unprecedentedly, ranking as the third-largest economy globally, just behind the United States and China.
This seismic shift has elevated cybersecurity from a peripheral IT function to a critical enabler of organizational resilience. It is no longer a technical concern relegated to IT teams but a strategic imperative shaping modern enterprises' trust, growth and sustainability.
Yet, the Digital Operational Resilience Act (DORA)—which took effect this month, without a transitional period—often feels like burdensome regulation for many medium and large enterprises. This narrow perspective misses the point. These frameworks aren’t bureaucratic obstacles but strategic tools to build stronger defenses, ensure operational continuity and earn unshakable stakeholder trust.
Compliance is an opportunity to transform weaknesses into strengths, turn risk into growth and establish a foundation for long-term success. Over the past 20 years of working with organizations, I’ve seen how strategic compliance redefines risk posture and positions businesses as field leaders, opening new avenues for growth and success.
This blog post explores the steep costs of ignoring compliance, actionable strategies for aligning with regulatory frameworks and real-world examples of how organizations have leveraged compliance to future-proof their operations.
Let’s move beyond the checkbox mentality and use compliance to unlock innovation, resilience, and trust, ensuring we are always one step ahead of potential risks.
The Hidden Costs of Non-Compliance
Let’s examine some of the hidden costs of non-compliance:
1. Financial Penalties That Stifle Growth
Failing to comply with DORA promptly can result in fines of up to 2% of global annual turnover. In 2023, European financial institutions experienced the consequences, facing penalties that forced them to accelerate their resilience efforts under intense regulatory scrutiny.
2. Erosion of Trust—A Fragile Asset
Cyber breaches destroy customer trust, often irreparably. The MOVEit vulnerability exploit of 2023 exposed sensitive data from major organizations, including Shell, leading to customer dissatisfaction and reputational harm.
3. Operational Chaos and Service Disruption
Cyber incidents halt operations, often for extended periods. The Capita data breach of 2023 disrupted critical client services, exposing the company’s lack of preparedness and underscoring the importance of operational resilience.
Reframing Compliance as a Strategic Advantage
Compliance can be viewed as a strategic advantage in the following ways:
1. Strengthen the Supply Chain
A chain is only as strong as its weakest link. Vendors often serve as entry points for attackers.
- Conduct regular risk assessments and enforce stringent security standards for third-party vendors.
Following the MOVEit breach, companies tightened vendor oversight to mitigate cascading risks.
2. Institutionalize Incident Response Excellence
Cyber incidents are inevitable; unpreparedness isn’t. A robust incident response plan distinguishes resilient organizations.
- Develop and rehearse a comprehensive incident response framework.
Optus drastically reduced response times after revamping its playbook after the breach in 2023, unlike Capita, whose delays worsened the incident’s impact.
3. Embed Compliance into Core Operations
Compliance shouldn’t be an afterthought; it should drive operational confidence.
- Proactively align processes with DORA requirements.
Société Générale enhanced anomaly detection systems and vendor risk frameworks in 2023, demonstrating how compliance bolsters operations.
4. Leverage AI for Proactive Defense
Cyber attackers evolve rapidly; your defenses must grow faster.
- Use AI-driven tools for real-time threat detection and resolution.
In 2024, healthcare providers across Europe used AI to thwart ransomware attacks, ensuring uninterrupted services.
5. Foster a Cybersecurity-First Culture
The strongest defenses are people-driven. A cyber-aware workforce is your best asset.
- Invest in ongoing training and leadership-driven awareness programs.
Through targeted training programs, ING Bank reduced phishing attack success rates by 40% in 2023.
Avoid These Common Compliance Pitfalls
- Neglecting Vendor Risks: Supply chain vulnerabilities, like those exposed in the MOVEit and Kaseya incidents, highlight the dangers of insufficient vendor oversight.
- Underfunding Cybersecurity: Short-term cost savings often lead to long-term damage.
- Siloed Compliance Efforts: Disconnected teams create exploitable gaps. Integrated frameworks are essential.
- Static Compliance Models: Cyber risks evolve; compliance must be a continuous process, not a one-time effort.
Thriving Through Compliance-Driven Innovation
DORA presents financial institutions with an ambitious mandate: to fortify their Information and Communications Technology (ICT) ecosystems against an evolving cyber threat landscape. However, its implementation comes with significant hurdles. Here’s a closer look at the most demanding requirements and why they’ll stretch even the most prepared organizations.
1. Establishing a Future-Ready ICT Risk Framework
DORA insists on a robust ICT risk management framework that integrates seamlessly with business continuity and disaster recovery plans.
Many organizations are trapped in a maze of outdated legacy systems. Aligning these with modern risk practices and ensuring consistent monitoring across sprawling IT environments will demand vision, resources and bold leadership.
2. Taming the Third-Party Risk Beast
Financial entities depend on a network of third-party providers, especially cloud services. DORA makes institutions accountable for managing risks across this ecosystem.
Concentration risk is real; many firms lean heavily on a handful of global tech giants. Ensuring compliance, especially from providers beyond EU borders, while renegotiating contracts to include audit rights and termination clauses will test even seasoned risk teams.
3. Accelerating ICT Incident Reporting
DORA requires entities to detect, manage and report major ICT incidents within one business day.
Responding in 24 hours means organizations must master real-time visibility. Gathering actionable data, cutting through noise and crafting an accurate report under pressure will separate the leaders from the laggards.
4. Elevating Operational Resilience Testing
Regular, risk-based testing—think penetration tests on critical systems—is non-negotiable under DORA.
These tests are resource-intensive and demand skilled expertise. They'll expose vulnerabilities that expert resources must swiftly remediate to avoid regulatory penalties or reputational fallout.
5. Embedding ICT Governance at the Top
DORA raises the stakes for senior management and boards, making them directly accountable for ICT risk governance.
Many leaders need more technical depth to oversee this domain effectively. Bridging this knowledge gap while embedding a culture of accountability will require relentless focus and stakeholder engagement.
6. Designing Resilient Continuity Plans
Robust business continuity and disaster recovery plans must now withstand rigorous testing, including worst-case scenarios.
Real-world scenarios are rarely predictable. Synchronizing recovery efforts across global teams, systems and third-party providers adds layers of complexity.
7. Navigating Regulatory Overlap
DORA is one of many games in town. Its requirements overlap with TIBER-EU (Threat Intelligence-Based Ethical Red Teaming) and the NIS2 Directive, creating potential conflicts for organizations operating in critical infrastructure.
Harmonizing these regulatory regimes without duplicating efforts is like walking a tightrope in high winds.
8. Scaling Risk Data Reporting
Organizations must submit detailed reports on ICT risks, incidents, and resilience testing to regulators on demand.
Consolidating data from disparate systems, ensuring its accuracy, and presenting it in a way that meets regulatory expectations will stretch even the most mature reporting systems.
Winning the DORA Challenge
DORA is more than a compliance exercise; it’s a blueprint for digital resilience. To succeed:
- Act early: Don’t wait until it’s too late; start working on DORA compliance today.
- Invest in talent: Ensure you have the right people and skills to support your compliance efforts and navigate complex risk landscapes.
- Partner strategically: Strengthen relationships with regulatory bodies and work closely with your vendors and third-party providers to ensure they meet your security standards.
- Foster a resilience culture: Make cybersecurity and compliance a top priority throughout your organization and embed ICT risk as a shared responsibility from the boardroom to the frontline.
Explore ENISA and ISACA resources (several listed below) for further guidance and invaluable insights into navigating complex regulations, addressing emerging threats and embedding resilience into your organization’s DNA.
DORA’s demands are steep, but the prize—a resilient, trusted financial ecosystem—makes the climb worthwhile. Ultimately, the organizations that thrive will view DORA not as a box-ticking exercise but as an opportunity to redefine resilience in an era of relentless disruption.
