Ensuring the resilience of operational systems is paramount. Disruptions can ripple through the global economy, threatening financial stability and consumer trust. To address these challenges, the Digital Operational Resilience Act (DORA) establishes a regulatory framework designed to enhance the operational integrity of financial institutions and protect against system vulnerabilities. While DORA primarily regulates entities within the financial sector, it also recognizes the pivotal role of secondary providers in achieving its objectives.
Secondary providers are external organizations that deliver critical services to financial institutions. Their contributions are indispensable for maintaining operational resilience and regulatory compliance. Understanding the role of secondary providers, and identifying which entities qualify, is essential for financial institutions and the providers themselves.
What Are DORA Secondary Providers?
Secondary providers are organizations that supply critical services or support to financial institutions regulated under DORA. These services often include cloud computing, cybersecurity, IT support, and more. In an interconnected financial ecosystem, these partnerships ensure operational resilience while enabling financial institutions to focus on core business objectives.
Key Examples of DORA Secondary Providers
- Cloud Service Providers
These organizations deliver cloud computing technologies that allow financial institutions to store, manage, and access data securely and remotely. With the shift toward digital operations, reliable cloud services are essential for data management and operational efficiency.
Example: A financial institution using a cloud platform for secure document storage and real-time collaboration benefits from the scalability and uptime assurance of a trusted secondary provider. - Software-as-a-Service (SaaS) Providers
Offering software solutions tailored to the financial sector, SaaS providers are integral to operational workflows. Their scalability and internet-based accessibility make them valuable for tasks ranging from customer relationship management to regulatory reporting.
Example: An investment firm uses SaaS tools to automate compliance tracking, ensuring they meet DORA’s regulatory standards. - Payment Processing Providers
As facilitators of payment transactions, these organizations enable financial institutions to manage payment flows effectively and securely.
Example: A bank partners with a payment processing provider to ensure seamless online transactions for its customers. - IT Support and Consultancy Firms
Offering troubleshooting, system upgrades, and strategic IT guidance, these firms help regulated entities maintain a robust technological backbone.
Example: A financial institution consults an IT firm to implement fail-safe systems that mitigate downtime during cyberattacks. - Cybersecurity Firms
Cyber threats are an ever-present risk in the financial sector. Cybersecurity firms support financial institutions by developing incident response strategies, conducting risk assessments, and implementing cutting-edge security measures.
Example: A bank hires a cybersecurity firm to conduct a penetration test, identifying and mitigating vulnerabilities in their digital infrastructure. - Data Processing and Analytics Companies
Data-driven insights are essential for informed decision-making and operational efficiency. Secondary providers in this field help financial institutions unlock the potential of their data.
Example: An analytics firm provides predictive models for fraud detection, improving the bank’s response times and reducing losses. - Telecommunications Companies
Reliable communication infrastructure is vital for operational resilience. Telecom providers ensure secure and uninterrupted connectivity.
Example: A financial institution partners with a telecom company to deploy a high-availability network for critical operations.
The Importance of Secondary Providers in the DORA Framework
The role of DORA secondary providers cannot be overstated. They are the backbone supporting financial institutions’ efforts to comply with DORA and maintain operational integrity. By outsourcing critical functions, financial institutions can focus on their core competencies while leveraging specialized expertise from secondary providers.
The relationship between regulated entities and secondary providers is more than transactional; it is collaborative. Clear communication, shared responsibility for risks, and proactive vulnerability management ensure both parties navigate regulatory landscapes and operational challenges effectively.
Strengthening Your Operational Resilience with Connected Risk
Navigating the complexities of DORA and managing relationships with secondary providers requires an integrated approach. This is where Connected Risk from Empowered Systems comes in. Connected Risk provides financial institutions with the tools to manage third-party risks, monitor compliance, and ensure operational resilience under DORA.
Why Choose Connected Risk?
- Comprehensive Risk Oversight: Stay on top of vendor compliance with advanced dashboards and analytics.
- Regulatory Alignment: Simplify adherence to DORA and other regulatory frameworks.
- Streamlined Collaboration: Foster stronger relationships with secondary providers through shared data and insights.
Take the first step toward operational excellence. Schedule a Connected Risk demo today and see how it can empower your institution to thrive in a digitally resilient ecosystem.
