1. The EU’s Digital Operational Resilience Act (DORA) raises the bar for IT recovery
Regulation may not sound exciting, but trust me, DORA is a game-changer. The EU is telling financial institutions that downtime is no longer an option. This law requires banks, insurers, and other key financial players to restore critical IT systems within two hours of an outage. Why? To protect consumers and keep the financial ecosystem steady.
Imagine this: You’re a bank, and your system goes down for a day. Customers lose access to their funds, transactions stall, and confidence takes a hit. That’s what DORA is designed to prevent. It’s proactive rather than reactive, a blueprint for resilience that makes sure businesses can handle disruptions without compromising service.
DORA isn’t just for companies in the EU either. If your business touches EU markets, you’re in. This is a global concern now. The deadline for compliance has passed, so if you’re not already ready, the time to act is now.
2. Backup systems alone won’t cut it
Too many companies make a critical mistake: they assume that having backups means they’re prepared. Not true. Backups are just step one. If you can’t recover quickly and efficiently, your backups are useless.
The process of recovery is where you win or lose. Companies often get caught off guard because they don’t test their systems. A plan on paper isn’t the same as executing it in the middle of a crisis. You have to simulate outages and run recovery drills. Doing this reveals weak spots, as maybe your backups are out of date, or maybe your team isn’t ready to handle the pressure.
“Don’t just assume the systems work. You need to test them, over and over, until failure is squeezed out. That’s the mindset businesses need to adopt for IT resilience.”
3. CIOs are the key players in DORA compliance.
The Chief Information Officer (CIO) is the person who makes the tech work. Under DORA, the CIO’s role has never been more critical. It’s up to them to figure out if the company is affected by these regulations and, if so, ensure compliance is baked into operations.
The first step is to collaborate. The CIO can’t do it alone. They need to work with Chief Information Security Officers (CISOs), compliance teams, and external auditors to cover all bases. This means creating a strong recovery strategy, securing systems against cyber threats, and regularly testing everything to make sure it works under pressure.
For CIOs, this is about leadership. DORA compliance must be viewed with a long-term mindset. It’s the difference between scrambling in a crisis and being ready to act. Readiness is a massive competitive advantage.
4. Noncompliance is a costly mistake
Failing to meet the requirements can lead to massive fines, up to $20 million per incident. But that’s not the worst of it. Noncompliance damages your reputation. Customers lose trust, regulators start breathing down your neck, and the press has a field day. It’s the kind of storm no business wants to face.
There’s a deeper issue here. Many companies assume they can cut corners until something goes wrong. It’s like speeding, as no one notices until you get pulled over. But the moment a disruption happens, you’re exposed. Regulatory fines, recovery costs, and lost business add up fast.
Take the CrowdStrike incident in 2024, it grounded flights, disrupted financial transactions, and cost Delta Air Lines $500 million. That’s a real-world example of what happens when systems aren’t prepared for the worst. DORA exists to prevent exactly this kind of disaster.
Key takeaways for business leaders
- DORA mandates rapid recovery: The EU’s Digital Operational Resilience Act (DORA) requires financial institutions to restore critical IT functions within two hours of an outage. Compliance is non-negotiable, and businesses must ensure their systems can recover quickly to avoid penalties and operational disruptions.
- CIOs must lead resilience efforts: CIOs need to assess DORA’s impact on their organizations, oversee compliance, and make sure recovery protocols are in place. This includes collaborating with CISOs, testing backups, and ensuring recovery procedures are effective under pressure.
- Backup systems are not enough: Simply having backups won’t guarantee compliance or resilience. Companies must test and validate their recovery processes regularly to ensure swift and reliable restoration during outages, minimizing downtime costs.
- Noncompliance risks significant penalties: Failing to meet DORA requirements can lead to heavy fines, reputational damage, and increased operational costs. CIOs should prioritize ongoing testing and real-time assessments to stay compliant and mitigate risks.
