Roman Zednik, Field CTO, Tricentis
With the Digital Operational Resilience Act (DORA) now in effect, financial institutions must take action to fortify their digital ecosystems. The stakes are high: non-compliance could result in hefty fines, reputational damage, and operational disruptions. Given the financial sector’s reliance on intricate workflows – from transaction processing to customer account management – identifying and mitigating IT vulnerabilities is vital.
DORA requires firms to demonstrate operational continuity, maintain the functionality of business-critical systems during disruptions, report IT incidents, and foster sector-wide information sharing to enhance collective resilience. Financial organisations must therefore move beyond static business continuity plans to ensure stability amid IT outages and cyber-attacks.
Regular evaluation and testing of IT systems, including third-party suppliers, is essential to uncovering and addressing potential weaknesses and ensuring compliance. By identifying vulnerabilities across both customer-facing and back-end systems, financial institutions can safeguard operations and uphold customer trust.
The compliance landscape: Why testing matters
Financial workflows often involve multiple interconnected systems, each presenting potential vulnerabilities. A minor glitch in one system can cascade across others, disrupting services and compromising customer trust. DORA introduces stringent requirements to ensure financial institutions can withstand, respond to, and recover from operational disruptions. Central to these requirements is the need for robust digital resilience testing, as outlined in Article 24 of the regulation.
DORA emphasises a risk-based approach to digital resilience. By prioritising high-risk areas and implementing comprehensive testing strategies accordingly, organisations can focus testing resources where they’re needed most and proactively address potential issues before they impact customers.
Automated, continuous testing ensures financial institutions can adapt to constant changes from security patches to feature enhancements, evaluating every modification for compliance and functionality.
Beyond functional checks
However, effective DORA compliance requires more than functional testing. Financial institutions must conduct performance testing to ensure systems can handle peak loads, such as how an online portal performs when accessed by thousands of users simultaneously.
End-to-end testing is equally critical, validating complex workflows like loan approvals involving multiple systems and integrations. Negative testing, which simulates invalid inputs to verify that systems handle errors securely, further reduces the risk of breaches. By integrating these testing types, financial institutions can identify vulnerabilities across their entire digital landscape, ensuring comprehensive resilience.
Incident management and reporting
DORA mandates robust incident management and reporting mechanisms. Automated testing tools play a critical role here too, enabling real-time alerts when systems detect issues such as login failures or data discrepancies, and maintaining detailed records of tests, incidents, and resolutions.
Automated reporting streamlines incident detection, ensuring vulnerabilities are flagged and addressed promptly. For example, one major bank’s nightly testing regimen runs 20,000 automated smoke tests, identifying potential issues arising from even minor changes before customers are impacted.
This transparency supports regulatory audits and demonstrates compliance efforts, enabling financial institutions to demonstrate due diligence. Such proactive measures are essential for meeting DORA’s requirements for real-time incident detection and reporting.
Moreover, by providing a centralised platform to document and manage testing requirements, testing tools can also support decision-making, allowing financial institutions to prioritise tests based on risk assessments. These tools also integrate seamlessly with platforms like Jira and Azure DevOps, streamlining incident tracking and resolution.
Preparing for a post-deadline world
The lessons of GDPR compliance suggest that regulatory enforcement for DORA may take time to ramp up. However, financial institutions should not delay their preparations. The ability to demonstrate proactive efforts, such as comprehensive testing and incident management, will be crucial in mitigating potential penalties and reputational damage.
Moreover, DORA’s implications extend beyond the EU. Global financial institutions and third-party service providers must also comply, ensuring that their operations meet the same standards of resilience and transparency.
While DORA compliance may appear to be a regulatory hurdle, it also presents an opportunity for financial institutions to differentiate themselves. By embracing robust testing and resilience strategies they can enhance customer trust by demonstrating a commitment to digital resilience. Proactive vulnerability management minimises the likelihood of costly disruptions, while automated testing reduces manual effort, freeing up resources.
DORA compliance is not just a regulatory requirement but a strategic imperative for financial institutions navigating an increasingly interconnected and regulated landscape. Automated, continuous testing and proactive vulnerability management are essential for meeting this challenge.
Financial institutions must act now to protect their operations, safeguard customer trust, and seize the opportunity to build a more resilient digital foundation by prioritising high-risk processes, conducting comprehensive testing, and maintaining detailed compliance records.
