The European Union's DORA (Digital Operational Resilience Act) requirements for third-party risk management include the following:
Due diligence: Organizations are required to conduct a thorough assessment of their third-party service providers to ensure they have appropriate security and privacy measures in place.
Contractual agreements: Organizations must have contractual agreements with their third-party service providers that specify their security and privacy obligations.
Continuous monitoring: Organizations must continuously monitor their third-party service providers to ensure they maintain their security and privacy obligations.
Incident reporting: Organizations must have a process in place for reporting and responding to security incidents involving their third-party service providers.
Business continuity planning: Organizations must have a business continuity plan that addresses the impact of a third-party service provider disruption.
These requirements aim to ensure that organizations properly manage the risks associated with using third-party services and take steps to maintain the security and privacy of sensitive information.
In recent years, there have been several high-profile data breaches in the European banking sector, many of which have been attributed to weaknesses in third-party risk management. For example, in 2021, a major European bank suffered a data breach that exposed sensitive customer information, including names, addresses, and financial details. The breach was traced back to a vulnerability in the systems of one of the bank's third-party service providers.
DORA Key Requirements
The European Union's DORA (Digital Operational Resilience Act) requirements for third-party risk management include the following:
Due diligence: Organizations are required to conduct a thorough assessment of their third-party service providers to ensure they have appropriate security and privacy measures in place.
Contractual agreements: Organizations must have contractual agreements with their third-party service providers that specify their security and privacy obligations.
Continuous monitoring: Organizations must continuously monitor their third-party service providers to ensure they maintain their security and privacy obligations.
Incident reporting: Organizations must have a process in place for reporting and responding to security incidents involving their third-party service providers.
Business continuity planning: Organizations must have a business continuity plan that addresses the impact of a third-party service provider disruption.
These requirements aim to ensure that organizations properly manage the risks associated with using third-party services and take steps to maintain the security and privacy of sensitive information.
Which companies are impacted by DORA?
The Digital Operational Resilience Act (DORA) scope is broad and it applies to all companies operating in the European Union (EU) that provide essential digital services, or use essential digital services provided by third parties. Essential digital services are defined as services that are critical to the functioning of the EU, including the provision of digital infrastructure, digital financial services, and digital health services.
DORA applies to companies in all sectors, including the following companies or industries:
Banking and finance: Financial institutions, such as banks and insurance companies, that provide financial services.
Health: Healthcare organizations, including hospitals and clinics, that provide medical services and use digital systems to support these services.
Technology: Software providers, cloud service providers, and technology consulting firms.
Retail: Retail sector, online retailers, and e-commerce platforms.
Essential Digital services: Companies that provide digital services, such as cloud computing and online marketplaces, that are critical to the functioning of the EU's digital economy
Companies that are part of the supply chain of essential digital services, including third-party service providers.
Companies must comply with DORA's requirements for third-party risk management in order to ensure the resilience and security of essential digital services and to protect the privacy of sensitive information. In summary, DORA applies to all companies operating in the EU that provide essential digital services or are part of the supply chain of essential digital services. The aim of DORA is to ensure the resilience and security of essential digital services and to protect the privacy of sensitive information.
How Trudexia can help
To address these challenges, the European Union has introduced the Digital Operational Resilience Act (DORA), which sets out requirements for organizations to properly manage the risks associated with third-party services. The requirements include conducting due diligence, having contractual agreements with third-party service providers, continuously monitoring their activities, having processes for incident reporting, and having business continuity plans in place. These requirements aim to ensure that organizations take a comprehensive approach to managing the security and privacy risks associated with third-party services and are better able to respond to security incidents and minimize the impact of disruptions.
However, the implementation of DORA requirements can be challenging, especially for organizations with complex third-party ecosystems. It is important for organizations to have a clear understanding of their third-party risks, and to put in place processes and technologies to continuously monitor and assess their third-party service providers. By doing so, organizations can better protect themselves and their customers from the impact of data breaches and other security incidents, and ensure the long-term resilience of their operations.
Trudexia’s solution makes managing risks posed by third parties and makes meeting the NIS Directive's requirements with few resources or time.