The financial industry has historically been one of the most regulated sectors due to its critical role in economic stability. In this context, the European Union has introduced the Digital Operational Resilience Regulation (DORA), a regulation designed to strengthen the financial sector’s ability to withstand and recover from technological incidents and cyber-attacks.
Find out more about how AI helps to comply with regulations such as DORA
Key DORA requirements for financial institutions
On January 17th, 2025, this European regulation came into force, establishing a regulatory framework to strengthen the IT security of financial institutions. This regulation seeks to ensure that institutions such as banks, insurers, and investment firms remain resilient to serious operational disruptions.
DORA imposes several specific obligations for Information and Communication Technology (ICT) risk management in the financial sector. Highlights include:
1. ICT Risk Management and Governance:
Entities must develop comprehensive frameworks to identify and classify critical assets, conduct ongoing risk assessments, and establish appropriate cybersecurity measures. The management body is responsible for defining risk management strategies and can be held personally liable for non-compliance.
2. Incident Reporting:
It is mandatory to establish systems to monitor, manage, record, classify, and report ICT-related incidents. Entities must report to the competent authorities and affected customers and partners on serious incidents, providing initial, interim, and final reports.
3. Digital Operational Resilience Testing:
Financial institutions should conduct periodic tests to assess their ability to withstand and recover from ICT-related incidents. These tests seek to identify vulnerabilities and ensure the effectiveness of the security measures implemented.
4. Risk Management of Third-party ICT Service Providers:
DORA establishes the need to monitor and manage the risks associated with third-party technology service providers. This includes assessing suppliers’ security and ensuring they comply with established standards.
Challenges and opportunities in the implementation of DORA
The implementation of DORA presents both challenges and opportunities for financial institutions:
| Challenges | Opportunities |
|---|---|
| Adapting to new requirements can involve significant costs and the need to upgrade technological infrastructures. | DORA offers the opportunity to strengthen digital infrastructure, improve risk management, and increase confidence in digital financial services. |
| It is essential to ensure that all personnel are trained in the new policies and procedures to ensure compliance. | The adoption of advanced technologies, such as AI, can improve operational efficiency and provide a competitive advantage in the marketplace. |
The role of artificial intelligence in DORA compliance
The use of artificial intelligence and data analytics in banking is not new, but with DORA it becomes even more relevant. AI-based solutions can help institutions monitor their systems in real-time, detect anomalies, and prevent failures or fraud before they become critical problems.
AI-based solutions enable:
Analysis of large volumes of data:
AI efficiently processes large amounts of structured and unstructured data, identifying patterns and anomalies that could indicate potential risks. For example, through machine learning, it is possible to detect unusual financial transactions or behaviors that suggest fraud or bribery.
Regulatory compliance automation:
AI can automate monitoring and reporting requirements, ensuring that entities comply with current regulations. This includes detecting potential violations and generating necessary reports for regulatory authorities.
Fraud detection and prevention:
Using machine learning algorithms, AI identifies patterns of behavior that may indicate fraudulent activity, enabling proactive response and risk mitigation.
Technology solutions to strengthen operational resilience
To meet DORA requirements, financial institutions can implement a variety of technology solutions to enhance their digital operational resilience:
1. Interaction Recording and Analytics:
The most advanced platforms, such as Recordia, offer AI-powered call recording and voice analytics services, enabling all omnichannel interactions to be captured and analyzed. This ensures regulatory compliance and provides deep insights into conversations, facilitating risk detection and improved customer satisfaction.
2. Voice Biometric Authentication:
Authentication using voice biometrics turns customers’ voices into passwords, creating secure and efficient interactions. This technology detects fraud and impersonation, improving operational efficiency and reducing risks associated with unauthorized access.
3. AI-Powered Conversation Analysis:
Intelligent conversation analysis enables financial institutions to learn from every interaction, guaranteeing an excellent customer experience and ensuring regulatory compliance. This includes transcribing and analyzing conversations to identify areas for improvement and detect potential non-compliance.
The entry into force of DORA marks a milestone in the regulation of digital operational resilience in the European financial sector. Financial institutions must adapt to these new requirements, taking advantage of the technological solutions available to ensure compliance and strengthen their position in an increasingly digitized environment.
Find out more about how advanced AI solutions help regulatory compliance by clicking here.