In today’s ever-evolving digital landscape, regulatory frameworks like DORA (Digital Operational Resilience Act) and NIS-2 (Network and Information Systems Directive) have emerged as critical pillars for ensuring robust Cyber Security practices across industries. Both frameworks aim to strengthen the security of critical infrastructure and systems, yet they target different sectors and impose specific requirements on those sectors. In the financial industry, institutions must navigate both DORA and GDPR (General Data Protection Regulation).

DORA vs. NIS-2: Key Differences and Overlaps

Both DORA and NIS-2 share common goals around incident reporting and Cyber Security, yet they apply to different sectors and assign legal responsibility differently.

DORA focuses exclusively on financial institutions, ensuring that they can withstand, respond to, and recover from operational disruptions and cyber threats. It outlines specific incident reporting requirements and places a strong emphasis on the accountability of a company’s board of directors. This means that the board members, who are traditionally less involved in Cyber Security decisions, now are responsible for ensuring that strong Cyber Security measures are in place.

On the other hand, NIS-2 applies to a much broader range of sectors, including energy, transport, health, and digital infrastructure. Like DORA, it also sets strict incident reporting standards and shifts the legal responsibility for Cyber Security to the company’s board, ensuring that top leadership is held accountable for any lapses.

Despite these commonalities, there is a crucial difference for financial institutions. Because DORA is designed specifically for finance, these organizations must prioritize DORA compliance over NIS-2. This prioritization can create challenges for financial institutions that operate across multiple sectors, requiring them to juggle overlapping regulations while ensuring that DORA’s specific requirements take precedence.

DORA and GDPR

In addition to NIS-2, financial institutions must also navigate the intersection between DORA and GDPR. While GDPR focuses on the protection of personal data, DORA emphasizes operational resilience in the face of cyber threats. DORA does not replace GDPR; instead, it adds another layer of compliance, particularly around incident reporting.

For organizations that fall under the scope of both DORA and GDPR, it’s important to recognize that compliance with one framework does not automatically satisfy the requirements of the other. Companies must ensure that they report incidents to the respective bodies governing each regulation and adhere to the specific timelines they set. This can be particularly challenging when an incident involves both personal data and operational disruptions, as businesses will need to coordinate their responses across multiple regulatory bodies.

For example, a cyber incident that leads to data breaches and operational downtime will trigger reporting requirements under both DORA and GDPR. Each framework has its own reporting timeline, which means companies must carefully manage these overlapping obligations to avoid penalties.

Conclusion: Staying Compliant in a Complex Regulatory Landscape

The regulatory landscape is becoming increasingly complex, especially for financial institutions that must comply with multiple frameworks like DORA, NIS-2, and GDPR. While these regulations may overlap in some areas, they each have unique requirements that organizations cannot afford to overlook.

Prioritizing DORA compliance for financial institutions is essential, as it directly addresses the resilience of their operational systems. At the same time, organizations must not neglect their obligations under NIS-2 or GDPR. Understanding how these frameworks intersect and managing the dual compliance processes will be critical to maintaining a strong Cyber Security posture and avoiding penalties.

As the digital threat landscape continues to evolve, regulatory bodies are likely to introduce even more stringent requirements. Staying ahead of these changes will require a proactive approach to compliance, especially at the board level, where accountability now firmly resides.