Implications, regulations and technical standards of DORA for UK entities

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Reviewed by: Nojus (Noah) Bendoraitis

I remember sitting in a training session a few weeks ago when a colleague asked, “Does DORA apply to UK firms?” That question caught my attention—not only because it was straightforward, but also because it highlighted a common misconception: even though the UK is no longer part of the EU, the digital operational resilience framework introduced by the EU still has important implications for many UK organizations. 

In this post, I want to share insights on how the evolving EU requirements intersect with our local operational resilience regime and offer actionable strategies to navigate these changes.

Why DORA still matters in the UK

When the EU introduced the DORA regulation, its aim was straightforward: strengthen the financial sector’s defenses against digital and cyber threats, while creating a consistent set of operational resilience rules across member states. If that were the whole story, one might assume that post-Brexit UK doesn’t need to worry. However, the reality is more nuanced. 

Though DORA legislation in the UK doesn’t formally exist—because it’s an EU regulation—many organizations here still find themselves navigating DORA’s extraterritorial reach. When business owners ask, “Does DORA apply to the UK?” the answer often is “It depends.” If you hold a significant chunk of your business in the EU or you’re a critical technology provider to EU financial entities, you’ll likely need to follow DORA’s framework. On top of that, the UK has its own strong operational resilience framework, so many firms will need to juggle both sets of rules. 

Aligning UK and EU Strategies for Digital Operational Resilience

Before DORA measures emerged in the EU, UK regulators—through bodies like the Bank of England, Prudential Regulation Authority (PRA), and Financial Conduct Authority (FCA)—had already established a robust operational resilience framework. Many UK-based companies have developed systems that focus on safeguarding important business services, setting impact tolerances, and conducting scenario testing. However, the new EU requirements sometimes differ in scope and terminology. For example, while local regulations emphasize “important business services,” the EU framework takes a broader approach by focusing on ICT systems and incident response protocols.

I recently worked with a mid-sized financial firm that needed to reconcile these differences. They discovered that by aligning their existing processes with the new digital resilience requirements, they could enhance both their local compliance and their readiness for cross-border challenges. This experience taught me that integrating the two regimes isn’t about doubling the work—it’s about streamlining practices to serve multiple regulatory needs. 

But before discussing how UK-based companies should approach DORA, let’s overview the existing regulations and compare them to the EU Digital Operational Resilience Act.

Mandatory cybersecurity regulations in the UK: a brief comparison with DORA

UK organizations are subject to a number of mandatory cybersecurity regulations that ensure robust protection against digital threats. These regulations, while complementary to the digital operational resilience requirements in DORA, differ in scope and emphasis. 

The table below provides a snapshot of key UK cybersecurity regulations alongside their main features and a brief comparison with DORA.

UK cybersecurity regulations vs. DORA

Regulation / frameworkScopeKey cybersecurity requirementsComparison with DORA
NIS regulations 2018Operators of essential services and digital service providersImplementation of appropriate cybersecurity measures; incident reporting; risk managementBroad cybersecurity obligations across sectors; less prescriptive on ICT testing and third-party oversight compared to DORA
FCA and PRA operational resilience guidelinesUK financial institutions including banks, insurers, and investment firmsRobust ICT risk management; incident reporting; business continuity planning; cybersecurity controlsSimilar focus on operational resilience but tailored to local market needs and emphasis on important business services rather than a comprehensive ICT framework
Cyber Essentials schemeOrganizations working with government and critical infrastructureBasic cybersecurity hygiene controls; regular risk assessmentsA voluntary certification scheme often required for government contracts; less comprehensive and detailed than DORA’s framework

UK cybersecurity regulations—including the NIS regulations and guidelines from the FCA and PRA—aim to uphold a high standard of digital security and operational resilience. In contrast, DORA offers detailed, uniform, and prescriptive measures, especially regarding digital operational resilience testing and third-party oversight, while UK rules tend to adopt a broader, more locally nuanced approach.

This divergence makes DORA particularly relevant for organizations operating in both local and EU markets. Adopting DORA’s requirements can help businesses develop a unified and efficient risk management strategy because its consistent framework simplifies compliance across different jurisdictions. With standardized guidelines and procedures, companies can align their risk management practices more seamlessly, reduce redundancy, and enhance their overall ability to identify, assess, and mitigate risks systematically.

Unpacking the technical standards of DORA

So, what are the specific DORA technical standards that impacted UK entities follow? DORA’s technical standards are detailed in Regulatory Technical Standards (RTS) developed in consultation with the European Supervisory Authorities (ESAs). They address the following areas: ICT risk management frameworks, incident reporting and classification, digital operational resilience testing, third-party risk management, information sharing, and cooperation. Let’s take a deeper look at each of them. 

Building a robust ICT risk management framework

One of the core requirements under DORA is the establishment of a comprehensive ICT risk management framework. Financial institutions and service providers must continuously assess and address potential vulnerabilities, integrating mechanisms for preventing, detecting, and mitigating ICT risks. 

This isn’t a one-time process but an ongoing effort, where organizations must develop governance structures that clearly define responsibilities at the senior management level. A key part of this framework is lifecycle management, which means organizations need to manage ICT assets from procurement to decommissioning. Without a structured approach, outdated systems can become weak points in an organization’s security posture.

Standardizing incident reporting and classification

Another critical area is incident reporting and classification, where DORA introduces standardized rules for identifying and reporting major ICT incidents. Instead of ad hoc responses, entities must use predefined thresholds to classify incidents and submit reports to national authorities within strict timelines. 

A structured reporting process also means organizations need to conduct post-incident impact assessments, ensuring that lessons are learned and integrated into future response strategies. Without such measures, firms risk repeated disruptions, regulatory penalties, and reputational damage.

Strengthening digital operational resilience testing

Testing the resilience of ICT systems is another fundamental aspect of DORA. Financial institutions are required to perform regular digital operational resilience testing, including threat-led penetration testing (TLPT) and scenario analysis. These tests go beyond simple system checks—they simulate real-world cyberattacks to uncover vulnerabilities before they can be exploited. 

To remain compliant, organizations need to establish a formal testing governance structure, outlining how often tests should be conducted, the methodologies to be used, and how results should be reported. In a rapidly evolving threat landscape, resilience testing is no longer optional; it is an essential practice for safeguarding financial operations.

Enhancing third-party risk management

Oversight of third-party risk management is also a key focus area under DORA. With financial institutions increasingly relying on outsourced ICT services, ensuring the security of third-party providers is critical. Organizations must conduct risk assessments before entering into outsourcing agreements, ensuring that vendors meet resilience requirements. 

Contracts should include specific clauses that outline service providers’ responsibilities, while ongoing monitoring mechanisms must be in place to track performance and address risks before they escalate. Without these safeguards, organizations could find themselves vulnerable to disruptions originating outside their direct control.

Ensuring information sharing and cooperation

Finally, DORA promotes information sharing and cooperation between financial institutions and regulators. In a sector where cyber threats evolve rapidly, having access to up-to-date intelligence can make the difference between mitigating an attack and suffering significant operational downtime. 

This is why financial firms are encouraged—and in some cases required—to participate in cross-border collaboration initiatives, exchanging information on cyber threats and vulnerabilities. Crisis coordination mechanisms are also expected to be in place, ensuring a collective response in the event of widespread ICT disruptions.

Practical steps for UK entities

Although DORA is an EU regulation, its principles are shaping global financial sector resilience standards, particularly in the UK. While UK firms are not legally bound by DORA post-Brexit, many are voluntarily aligning with its standards to maintain regulatory compatibility, especially those with cross-border operations or aspirations to enter EU markets. 

Below I’m sharing some practical advice on how to approach DORA compliance in the UK. 

Adopting international standards for cybersecurity and business continuity

For UK firms looking to bolster their digital resilience, adopting globally recognized standards provides a structured approach to compliance and risk management. Two key frameworks stand out:

StandardPurposeKey benefits
ISO/IEC 27001Establishes a structured Information Security Management System (ISMS) to protect digital assets.Strengthens cybersecurity, ensures regulatory alignment, and reduces data breach risks.
ISO 22301Focuses on Business Continuity Management (BCMS) to maintain operations during disruptions.Enhances crisis response, minimizes downtime, and aligns with resilience testing mandates.

Integrating these standards into risk management strategies streamlines regulatory compliance, enhances resilience, and facilitates EU market access by demonstrating adherence to internationally recognized best practices.

Strengthening third-party risk management practices

With financial institutions increasingly dependent on outsourced ICT services, ensuring the security of third-party providers is critical. UK firms must establish a structured approach to vendor oversight.

Key requirements for third-party risk management in the UK

Third-party risk management practiceImplementation strategy
Pre-contract risk assessmentsEvaluate vendor security protocols and resilience measures before engagement.
Robust contractual agreementsInclude resilience clauses specifying security expectations, uptime guarantees, and incident reporting obligations.
Ongoing monitoring and auditsContinuously track vendor performance, conduct security audits, and assess compliance with resilience standards.
Exit strategies and contingency planningDevelop a transition plan in case of vendor failure, ensuring minimal business disruption.

UK regulators, including the FCA and PRA, have been tightening third-party risk requirements. Strengthening vendor oversight helps firms align with both UK and EU expectations while mitigating significant operational risks.

Improving incident response and resilience testing

A well-structured incident response and resilience testing framework is essential for protecting financial operations from cyber threats and system failures.

Key requirements for incident response in the UK

Incident response measureImplementation approach
Predefined classification thresholdsEstablish clear criteria for classifying and escalating major ICT incidents.
Incident playbooksDevelop response strategies for different cyber threats, including ransomware and data breaches.
Real-time threat monitoringDeploy automated detection tools for faster response and mitigation.
Post-incident analysisConduct root cause analysis to improve future resilience.

Beyond incident response, firms must also implement rigorous resilience testing to identify vulnerabilities before attackers do.

Key requirements for resilience testing in the UK

Resilience Testing MethodPurpose
Threat-led penetration testing (TLPT)Simulates cyberattacks to uncover vulnerabilities before they are exploited.
Scenario-based stress testingEvaluates system response under extreme operational pressures.
Tabletop exercisesTrains executives and IT teams on real-world cyber crisis scenarios.

UK organizations already participating in CBEST and TIBER-UK resilience testing frameworks are well-positioned to align with DORA’s expectations. Expanding these practices across the financial sector will be crucial for maintaining business continuity and regulatory compliance.

Staying informed on UK regulatory updates

As UK regulators continue refining operational resilience requirements, financial organizations must remain proactive in tracking policy developments and adapting their strategies.

Regulatory actionWhy it matters
Monitoring FCA, PRA, and Bank of England updatesEnsures compliance with evolving UK resilience regulations.
Engaging with industry bodies (e.g., UK Finance)Provides insights into best practices and regulatory trends.
Participating in regulatory consultationsHelps firms anticipate and shape upcoming compliance requirements.

With regulators placing increasing emphasis on cyber resilience and financial stability, firms that stay ahead of regulatory changes will be better positioned to navigate compliance challenges and mitigate emerging risks.

Charting a clear path forward

In the evolving landscape of digital operational resilience, preparing for dual compliance is not just about regulatory adherence—it’s an opportunity to fortify your business against digital threats. By mapping out your exposure, streamlining governance and incident management processes, updating contracts, and actively engaging in training and industry discussions, you can build a unified framework that satisfies both UK and EU standards.

Taking these proactive steps today will set you up for a smoother compliance journey tomorrow, ensuring that your organization remains agile, secure, and ahead of the curve regardless of where the regulatory landscape shifts.

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