Digitalisation is advancing at breakneck speed, and the financial sector is no exception. However, with increasing reliance on technology come greater risks: cyberattacks, system failures, issues with third-party providers… To address these challenges, the European Union has introduced the Digital Operational Resilience Act (DORA), a regulation designed to strengthen the technological security of companies in the sector.
This regulation, which came into force on 16 January 2023 and will be applied starting 17 January 2025, establishes a common framework for all financial entities, including insurance brokers like C1 Broker, to ensure their ability to operate securely in a digital environment filled with risks.
DORA aims to ensure that financial entities and critical service providers can withstand, respond to, and recover from technology-related incidents. Specifically, it harmonises the rules on operational resilience within the financial sector, applying to twenty different types of financial entities and third-party ICT service providers. The three European Supervisory Authorities (the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA)) are preparing strategic products to enable DORA’s implementation.
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What is DORA – Digital Operational Resilience Act?
In simple terms, DORA requires companies in the financial sector to take technological risks seriously. It establishes specific measures to prevent and manage technology-related issues. How does it achieve this? Through five key pillars:
- Technology risk management: Companies must have systems and processes in place to identify, control, and mitigate potential technology-related risks.
- Supervision of third-party providers: With more companies relying on cloud services, external software, or technological platforms, DORA demands that these providers also comply with high-security standards.
- Incident reporting: If a significant problem occurs, authorities must be informed within 24 hours, allowing swift measures to minimise damage.
- Resilience testing: Companies must periodically undergo simulations and tests to ensure preparedness for cyberattacks or technological disruptions.
- Information sharing: The regulation promotes collaboration between companies and authorities to improve responses to common threats.
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The Impact on the Insurance Sector
For insurance brokers, DORA has very clear implications. We must not only protect our own technological systems but also advise our providers and clients on how to comply with the regulation. Cyber insurance takes on a critical role here: it’s not just about protecting data but ensuring that businesses can continue operating after an incident.
DORA also requires us to be stricter with our technology providers. For instance, if we work with a data management platform or a cloud service, we need to ensure that they meet the same security standards we are held to.
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C1 Broker: A Helping Hand to Tackle the Challenge
At C1 Broker, we have been helping our clients protect themselves from digital risks for years. The arrival of DORA is just another opportunity to reinforce our mission: to offer insurance solutions that not only meet regulatory standards but also provide businesses with peace of mind during critical moments.
If you’re unsure how DORA might affect your business or need advice on cyber insurance, we’re here to help. Our goal is to ensure you’re prepared for whatever comes your way, whether it’s a regulatory change or an unexpected incident.
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Conclusion
DORA is not just another regulation; it’s a call to action for everyone working in the financial sector. It challenges us to be more responsible, aware, and resilient in the face of technological challenges. At C1 Broker Spain, we are ready to face this challenge with you, supporting you every step of the way.
We offer tailored cyber insurance solutions to protect businesses from digital risks. Whether you run a small business or a technology company facing unique challenges, our policies are designed to meet your needs. To learn more about how to protect your business from cyberattacks and other digital threats, visit our page: Cyber Risk Insurance.
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Contact us today for more information on Cyber Insurance for your business.