In the past two decades, nearly one-fifth of reported cyber incidents have affected the global financial sector, causing $12 billion in direct losses to financial firms. The European Union has taken decisive action to bring these figures down, focusing efforts on greater data transparency and imposing stringent regulations for the financial services sector. With the Digital Operational Resilience Act, or DORA, businesses are now legally obligated to prioritise transparency. However, many organisations may not have the systems or processes in place to address this new regulation, or don’t know where to start.

Let’s dive into what this regulation means for the financial sector, how to overcome hurdles to provide higher levels of transparency and delve into the solution to support compliance – record management and digitisation.

In short, DORA is an EU regulation that requires businesses to effectively manage ICT third-party risks and provide regulators with a log of cyber incidents.

The regulation is specific to the financial services sector and aims to strengthen the IT security of entities such as banks, insurance companies, and investment firms to ensure that the financial sector in Europe can stay resilient in the event of a severe operational disruption. Due to the amount of sensitive and confidential data financial organizations hold on their systems, the ramifications of a data breach are severe. This regulation serves as an extra layer of protection for customers and businesses alike.

Under DORA regulation, businesses need to be able to:

With organisations built on a foundation of customer and corporate trust, failure to meet this new regulation could cause damage to reputation as well as the risk of fines. Disorganised data and siloed records put institutions at operational and regulatory risk when the next audit comes around, and the only way to meet DORA demands is to provide full transparency.

What roadblocks to compliance do financial organisations need to look out for in their current setup? Record-handling presents a significant reporting and compliance challenge for businesses under DORA. Meeting these new standards means overcoming the following hurdles:

Reliance on legacy processes and systems: Many businesses are still using single-point solutions dedicated to specific tasks, meaning that data is often siloed, dispersed across a myriad of different systems. True digitisation means not only digitising information, but making storage and processes simpler, centralised, and transparent – and this is the only way to help support regulation.

Long and complicated data retrieval: Retrieving up-to-date and consistent information across systems is a challenge, resulting in wasted time and data inaccuracies.

Balancing data security and accessibility: Every customer account includes a substantial amount of sensitive data and information. Many institutions struggle to optimise compliance costs and address regulations while maintaining a level of data accessibility and security.

Manual processes for staff: Although digitised data has, for the most part, replaced paper documentation, old disorganisation habits have transferred to the digital realm. Often, employees must manually manage large volumes of data – a complex and tedious task that can bog down staff and take away time that could be dedicated to more value-add activities.

The answer is a fully-connected, digitalised, and centralised document management system.

Organisations need to ensure that all relevant information across business-critical systems can be accessed from a secure location. Easy search and retrieval of updated and accurate content is key. By integrating this single source of truth with, CRM, ERP, and tax planning and compliance systems, financial data can be synchronised for enhanced accuracy and consistency. Resulting reports and documentation are critical to DORA compliance. Organisations can also manage sensitive data and eliminate gaps and siloes in legacy infrastructure, improving security efforts and reducing risk of future cyber-attacks.

Record management systems can also prove vital to simplifying compliance processes with features such as:

Additionally, teams can easily set up a view-only repository for tax authorities and DORA regulators to process audits or compliance checks. Without these technologies, back-office employees must deal with the manual collection, retention and disposal of customer data to address the regulation. 

With greater data transparency and effective digitization of back-office processes, institutions can address emerging compliance requirements as and when they occur. This level of flexibility is the only way that organizations will be able to achieve total transparency in the long term, and observe DORA’s regulatory requirements.

Address DORA requirements with Laserfiche’s robust records management tools.