As an Eagle Scout, I was constantly reminded of the Scout motto, “Be Prepared.” The motto means to be ready in mind and body and to do one’s duty at any time. When morally applied to life, fruits of this motto result in productive citizens who are capable of not just being helpful to others but able to face life’s challenges with a strong heart.
The motto “Be Prepared” has exponentially increased in relevancy as I’ve grown. There are just so many decisions we make as people that preparation is vital in determining how we adjust for every moment. Whether it’s remembering to pack an umbrella on a rainy day to the grocery store or remembering to bring your passport for your next international flight, how we prepare has consequences.
In the world of third-party risk management (TPRM), risk practitioners are constantly preparing. Whether it’s for the next change to a seasoned regulation or for new internal or external requirements to help ensure their organization’s brand, people, and bottom line are protected.
One of the newest installments to the regulatory landscape that TPRM program leaders are preparing for is the Digital Operational Resilience Act (DORA). DORA is a purpose-built framework for the European Union (EU) to address financial institutions’ ability to withstand and recover from cyberattacks and operational disruptions, even if they originate with or affect their critical third-party vendors.
Below are just a few of the consequences that can result from a lack of preparedness for DORA:
Regulators want to see financial entities operating in the EU – along with any third-party Information and Communication Technology (ICT) vendors that support financial entities operating in the EU – to demonstrate resilience and show compliance with DORA requirements. A lack of willingness or activity towards ICT management can directly lead to crippling fines – up to 1% of daily profits, aggregating every day of non-compliance – and additional enforcement actions.
As we all know, we live in an age where news travels fast through a multitude of digital applications and news sources meaning that any organization that get fined or disciplined due to poor TPRM program adjustments for DORA has a ripple effect on an organization’s image as a trusted, credible, compliant brand.
At the heart of DORA, you will find an emphasis on what an organization should do to prepare for any ICT-related incidents associated with their third parties. Specifically, organizations should be proactively reporting ICT-incidents, conducting resilience tests, as well as gathering and validating ICT-driven data about their third parties with the goal of catching cyberattacks and outages before they cause serious operational disruptions.
Organizations that are penalized with DORA-driven fines and violations may result in dedicating time to more frequent audits and corrective actions. This can be a distraction from more fruitful initiatives like building partnerships, expanding their presence, and staying innovative. Organizations that can show evidence of their ICT resilience and collective DORA updates within their TPRM programs to regulators demonstrate that their compliance initiatives are important and that they care about their brand, particularly how it’s viewed by regulators, investors, employees, and customers.
As a consultant supporting technology used by some of the most effective, complex, and mature TPRM programs in the world, I have a front-row seat into how organizations take TPRM solutions like Aravo’s expandable risk-oriented platform and use it to centralize, automate, and integrate their internal/external systems into an actionable, result-oriented solution to manage their third parties. DORA is the newest regulation to the party and it’s time to prepare for the impact it will have in the EU and beyond.
Aravo offers a highly configurable data modeling solution that can take your DORA requirements and apply them into questionnaires for data collection from your third parties, forms for your internal stakeholders to initiate business processes, scoring methodologies to align with your needs and gain clarity into the riskiness of your third parties, integrate into your data provider subscriptions to validate/collect any applicable third-party data, as well as produce reports and dashboards with the type of drillable visualizations (i.e. geographical maps, bar charts, pie charts, trend lines, tabular views, etc.) needed to easily assess your ICT incidents and proactively make decisions regarding next steps.
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