Time is running out for you to become compliant with the DORA act. Discover how SAP LeanIX enables business transformation to help re-architect the financial services industry.
The Digital Operational Resilience Act (DORA) has placed a deadline on established financial institutions to ensure their customers' data and digital cash is safe in Europe. The financial industry is now running out of time to transform their business for the digital age.
Thankfully, SAP LeanIX empowers financial providers with a complete overview of their IT landscapes and the tools they need to road map their path into the future. Armed with this knowledge, you'll be DORA compliant in no time.
In the first of a series of articles looking at how SAP LeanIX empowers organizations to re-architect their industries, we start with financial services. How can this 300-year-old industry adapt and thrive in a digital age, and stay on the right side of new DORA regulations?
To find out more about how SAP LeanIX can help you comply with DORA fast, download our finance EA success kit:
DOWNLOAD: Success Kit - EA for Financial Services & Banking
A New Start For The Finance Industry
The Digital Operational Resilience Act (DORA)(https://www.digital-operational-resilience-act.com/) has put pressure on the financial services industry to prepare itself for a digital future. That, however, is easier said than done for one of the longest-standing industries in history.
The earliest banks first operated in ancient Mesopotamia, where temples lent out resources to struggling farmers and kept detailed records of it. Modern banks have spent the majority of their time closer in form to the friendly, neighborhood savings and loan that you see in the classic movie It's A Wonderful Life than as the AI-powered, digital crypto centers that they may wish to be.
The Bank Of England issued the first bank notes over 300 years ago, but online banking has been around for fewer than 40 of those years, and even the first computers only arrived 70 years ago. It's easy to see that foundations and processes established over 250 years may take some time and effort to adjust to a digital market.
Most financial institutions were savvy enough to see the potential of digital technology and online banking when it emerged, so rushed to leverage it. Unfortunately, this left them at a disadvantage.
Early computer suppliers in the 1960s couldn't have foreseen the rapid pace of change that would become the state of the modern world. The first enterprise computing systems were created as if they would remain sufficient in their initial state forever, and aren't flexible enough to adapt to the modern market.
Digital Challengers For The Finance Crown
The Digital Operational Resilience Act (DORA) is designed to make the legacy technology that banks and insurers were built upon safe in the digital age. That foundational technology, however, is incompatible with innovative tech, and extremely hard to replace.
Just as continuing to add new stories to a skyscraper will eventually cause it to collapse, adding new technology to computer systems that weren't designed to support them is now leading to disaster. Leveraging bleeding-edge artificial intelligence (AI) tools with 30-year-old Microsoft DOS-based systems is simply impossible, and so financial organizations are losing out to disruptive start-ups.
This isn't a problem limited to financial institutions, but since banks and insurers are among the oldest companies around and the first to leverage technology, they are struggling the most. Particularly since the digital finance revolution has seen disruptive online banks and insurers like Chase, Revolut, and Lemonade carving out market share.
Of course, ripping out and replacing the foundations of your tech stack in a digital transformation is an incredible undertaking, and we know that 70% of those who attempt to do so fail. This is leaving many financial institutions trapped, but the pressure to resolve this problem has just increased due to new European legislation.
What Is The DORA Act?
The Digital Operational Resilience Act (DORA) will be enacted by the European Union on January 17, 2025. It aims to increase the European financial services industry's digital resilience by imposing stringent IT system guidelines on financial services providers in Europe.
Financial organizations operating in Europe will now need to update their legacy IT systems in order to ensure they are protected against cyber attacks and outages. DORA will also serve to bring all current IT resilience legislation together under one act.
DORA has strict and comprehensive guidelines listed for:
- IT risk management and governance
- Incident response and reporting
- Digital operational resilience testing
- Third-party risk management
If you haven't already made your European operations compliant with DORA guidelines then you aren't likely to make it so within the next few months. The sooner you can do so, however, the less trouble you will be in with regulators.
Delaying will lead to administrative and even criminal sanctions being leveled at financial services leaders. So, what can you do to bring your organization in line with DORA as soon as possible?
How To Implement And Measure DORA Compliance
The Digital Operational Resilience Act (DORA) contains an expansive series of rules and measures. Before you can make yourself compliant with this new regulation, you need to know where you're in breach of it and where you aren't.
You need a complete overview of your IT landscape in order to see where changes are required by DORA and to report on your compliance to regulators. Establishing that kind of oversight requires building a single source of truth for information about your IT landscape.
Some organizations try to do this with Excel spreadsheets or tools that aren't intended for it. Yet, spreadsheets can be accidentally altered, deleted, or not be accessible to some of the stakeholders who need to leverage the data.
Not to mention, spreadsheets lack the advanced functionality that you need in order to comprehensively map and measure your IT landscape. You need to be able to log your landscape information in an agnostic, dedicated system that connects to your entire toolset, leverage advanced artificial intelligence (AI) automation, and collaborate with whoever you need to across your organization.
To revolutionize the financial services industry and achieve rapid compliance with DORA, you need SAP LeanIX.
Re-Architecting The Finance Industry With SAP LeanIX
The Digital Operational Resilience Act (DORA) will require most financial services institutions to undergo a business transformation to update their technology and their operations. Yet, most business transformations fail as they don't to account for the duality of modern business.
To succeed in transformation, you must transform your digital technology and your physical operations at the same time. This holistic approach is exactly what enterprise architecture was created to undertake.
Modern enterprise architects make use of digital platforms that store enterprise architecture information in a way that can allows it to be analyzed, visualized, and experimented upon. This enables enterprise architects to create road maps for transformation, including ones to match with DORA guidelines.
SAP LeanIX was designed to be the most innovative and integrated of these tools. From a huge number of integrations with other technology, to advanced artificial intelligence (AI) capabilities, and extensive visualization and diagramming tools, SAP LeanIX has everything you need to rapidly rebuild your financial services organization to comply with DORA before the regulators come calling.
To find out more about how SAP LeanIX can help you comply with DORA fast, download our finance EA success kit:
