DORA compliance: Turning regulation into a competitive edge

The Digital Operational Resilience Act (DORA) has officially come into force across the European Union, demanding businesses in the financial sector—banks, fintechs, insurers, investment firms, and third-party ICT providers—take significant steps to protect their operations against the growing threats of cyberattacks and IT disruptions. For many businesses, this new regulatory framework may feel like a heavy burden, but it can actually be a powerful competitive advantage, especially for those integrating financial services into their operations.

DORA: More than just compliance—A path to operational excellence

While DORA imposes mandatory regulations, it also offers a unique opportunity for organizations that embed financial services into their platforms. By focusing on operational resilience, DORA provides businesses with a strategic opportunity to build trust, credibility, and long-term stability—essential elements in today’s increasingly digital financial ecosystem.

For instance, look at companies like PayPal and Revolut. These firms didn’t just comply with regulations like PSD2 and GDPR—they used their compliance to enhance their reputations, build stronger relationships with customers, and expand their market share. For businesses in embedded finance, adopting DORA compliance standards can not only mitigate risks but also foster innovation and strengthen your position in a competitive market.

How DORA strengthens market resilience

DORA was designed to tackle the escalating risks of cyber threats, IT disruptions, and operational vulnerabilities that have plagued the financial sector. By focusing on five critical operational pillars, DORA ensures that organizations can anticipate, withstand, and recover from unforeseen disruptions. These pillars aren’t just about regulatory compliance—they’re about ensuring the longevity and reliability of your business:

1. ICT risk management: Businesses are required to implement robust governance frameworks, identify and assess risks, and maintain effective cybersecurity protocols. Take Monzo, for example: By implementing a proactive risk management strategy, the challenger bank was able to rapidly respond to threats, improving customer confidence and protecting its operations.
2. Incident management: Rapid incident reporting and recovery are critical. Businesses are expected to have mechanisms in place to swiftly identify and report cyber incidents. This is where companies like Stripe excel—they have built efficient and transparent incident management processes that provide quick recovery, which ultimately reinforces customer trust.
3. Operational resilience testing: Firms must now conduct regular resilience testing, including stress tests and simulated crisis scenarios. Regular stress testing was a key factor in Barclays’ ability to weather the financial crisis of 2008, and it remains a cornerstone of their operational strategy today.
4. Third-Party risk management: Businesses must closely monitor their supply chain, ensuring that third-party vendors adhere to the same high compliance standards. Adyen, a global payment platform, excels in this area by thoroughly vetting third-party vendors and maintaining an up-to-date risk management registry.
5. Information sharing: DORA encourages collaboration among financial institutions by facilitating the exchange of threat intelligence. Visa leads in this area by sharing cyber threat information with a network of financial institutions, improving industry-wide resilience.

The cost of non-compliance: Real business impact

It’s not just about avoiding regulatory penalties—compliance with DORA can protect your business from significant financial risks. The IBM Cost of a Data Breach report highlights that companies failing to meet compliance standards face, on average, a 12.6% increase in data breach costs, adding an extra USD 220,000 per incident. With the rising complexity of cyber threats, the risks of non-compliance are simply too great to ignore.

For example, a major financial services provider that neglected to implement the necessary cybersecurity measures saw its operations grind to a halt after a cyberattack. The breach resulted in millions of dollars in financial losses and severely damaged the company’s reputation—leading to a massive decline in customer trust and regulatory scrutiny. This is the type of risk that DORA aims to prevent, making compliance a crucial part of future-proofing your operations.

Leveraging DORA compliance as a strategic advantage

For businesses that are integrating financial services into their platforms, DORA compliance isn’t just about following the rules—it’s an opportunity to set your business apart. Here's how:

• Protecting your business and customers: By adopting DORA’s cybersecurity standards, businesses shield themselves from the growing threat of cyberattacks, ensuring the security of both their financial services and their customer base.
• Building credibility: DORA-compliant businesses signal to regulators, clients, and partners that they can be trusted to manage sensitive financial data and operations securely.
• Aligning with future regulations: Regulatory frameworks are only going to get stricter. By embracing DORA early, you align your business with high security standards, positioning yourself as a leader in a rapidly evolving regulatory landscape.
• Encouraging innovation: Operating within a well-regulated framework doesn’t stifle innovation—it fosters it. Businesses that embrace compliance can explore new financial products and services with the assurance that their operations are secure and resilient.

Toqio: Simplifying compliance for embedded finance

At Toqio, we make compliance easy. Our platform is designed with operational resilience at its core, ensuring that businesses can stay agile while navigating the complexities of regulatory frameworks like DORA, PSD2, GDPR, and PCI-DSS. Here’s how we help businesses embed resilience and security into their financial services:

• Operational resilience testing: We conduct annual updates and testing of our Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) to ensure we are always prepared for any situation.
• Incident management: Our security procedures are aligned with DORA’s incident management framework, ensuring that we can rapidly identify, report, and recover from any incidents.
• Third-Party risk oversight: We maintain a comprehensive list of service providers and vendors, conducting thorough risk assessments before contract signings and annual reviews to ensure compliance across our entire supply chain.
• Risk management framework: Our Security Team continually enhances Toqio’s internal risk management processes, ensuring that we meet and exceed the highest cybersecurity and operational resilience standards.

As a PCI-DSS certified platform, Toqio meets the rigorous security and operational resilience standards required for DORA compliance and other regulations, helping your business stay compliant and secure in a fast-changing digital landscape.

The future of compliance and resilience

As the regulatory landscape continues to evolve, businesses must prioritize resilience and compliance to stay competitive. By adopting DORA’s best practices today, you not only safeguard your business against future disruptions but also build a stronger, more trustworthy brand that can navigate an increasingly complex and regulated environment.

Companies that proactively integrate compliance into their operations will be better positioned to take advantage of new opportunities, while those that fail to comply risk falling behind. The time to act is now.