Why DORA Matters to UK Financial Institutions: A Strategic Imperative for GRC and Resilience
News and information from the Advent IM team.
- by Anthony Orjally
- Advent IM Blog
The financial services sector is under intensifying pressure to demonstrate resilience against operational disruptions and cyber threats. As the regulatory landscape evolves, the Digital Operational Resilience Act (DORA) is rapidly emerging as a key benchmark in ICT risk management and third-party oversight. While DORA is an EU regulation, its implications for UK financial firms—particularly those with cross-border operations or EU clients—are both material and urgent.
This blog outlines the strategic relevance of DORA for UK-based financial institutions and how aligning with its requirements can reinforce your governance, risk, and compliance (GRC) frameworks, while materially strengthening your overall digital resilience.
DORA: Not Just for the EU
DORA entered into force in January 2023, with a compliance deadline of 17 January 2025. It mandates a harmonised regulatory approach to ICT risk, applying to banks, insurers, asset managers, and third-party technology providers. Despite the UK’s departure from the EU, DORA is highly relevant to UK firms that:
- Operate EU-based entities or branches;
- Provide financial services to EU clients;
- Depend on cross-border ICT third-party service providers.
In practical terms, if your organisation interacts with the EU financial ecosystem, DORA compliance is no longer optional—it is a strategic necessity.
Embedding DORA into GRC Strategy
Financial institutions already operate in complex regulatory environments. However, DORA introduces a targeted emphasis on digital operational resilience, setting it apart from previous frameworks. Here’s how it directly impacts GRC:
- ICT Risk Management and Governance
DORA requires a risk-based approach to managing ICT across governance levels. Senior management must be actively involved, with clear accountability for digital risk—this includes regularly updated ICT risk registers, incident response plans, and crisis communication strategies.
- Critical Third-Party Oversight
The regulation introduces rigorous scrutiny of ICT third-party providers, including contractual clauses, risk classification, and mandatory exit strategies. UK firms must be able to demonstrate ongoing due diligence and resilience testing for their entire digital supply chain.
- Incident Classification and Reporting
Under DORA, significant ICT-related incidents must be identified, classified, and reported using standardised templates and thresholds. This ensures transparency and rapid supervisory engagement across borders.
- Advanced Resilience Testing
DORA goes beyond traditional cybersecurity controls. It mandates threat-led penetration testing (TLPT) for critical systems at least every three years, with a strong emphasis on red teaming, scenario-based stress testing, and continuous improvement cycles.
Strategic Benefits Beyond Compliance
DORA’s value extends well beyond tick-box compliance. For UK institutions, aligning with its framework:
- Improves investor and customer confidence by demonstrating operational maturity;
- Strengthens business continuity and reduces recovery time in the face of disruption;
- Enables seamless EU operations, avoiding regulatory fragmentation;
- Future-proofs digital strategy, ensuring readiness for increasingly sophisticated threat actors.
UK Readiness: Time is Running Out
Despite the two-year runway, a 2025 study by Trend Micro and Sapio Research found that 43% of UK financial firms are not expected to meet the January deadline, risking regulatory consequences and competitive disadvantage (ComputerWeekly, 2024).
Final Thought: Turning Compliance into Competitive Advantage
For UK financial organisations, DORA is a chance to move beyond regulatory minimums and build a resilient, future-facing digital infrastructure. Whether through enhancing cyber controls, tightening supplier oversight, or improving board-level risk accountability, early and full DORA adoption will position your firm as a leader—not a laggard—in the next generation of financial services.
Now is the time to act. DORA is not just another compliance hurdle—it is a strategic lever for operational strength, reputational trust, and market continuity.
Written by Ellie Hurst, Advent IM Commercial Director