ICT Risk Management

ICT Risk Management is a foundational pillar of the Digital Operational Resilience Act (DORA), emphasizing the need for financial institutions and ICT service providers to proactively identify, mitigate, and manage risks associated with their information and communication technologies.

This requirement, outlined in Articles 5–11, is one of the five core requirements of DORA, alongside:

• Operational Resilience Testing
• Incident Reporting
• Third-Party Risk Management
• Information Sharing

Together, these pillars form the foundation of DORA compliance. This guide delves into the intricacies of ICT risk management under DORA, providing a detailed roadmap to help organizations align their systems and processes with regulatory requirements.

📚 Related: The Digital Operational Resilience Act (DORA) - Regulation (EU) 2022/2554

What is ICT Risk Management?

ICT risk management refers to the systematic process of identifying, assessing, mitigating, and monitoring risks that could compromise an organization’s ICT infrastructure. These risks include cyberattacks, system failures, data breaches, and other operational disruptions that can impact business continuity and regulatory compliance.

Under DORA, financial institutions must implement a robust ICT risk management framework, integrating it into their broader operational risk management strategies to ensure resilience, security, and compliance.

📚 Related: Official DORA Journal of the EU

DORA Compliance Requirements for ICT Risk Management

Under Articles 5–11 of DORA, financial institutions must demonstrate their capability to manage ICT risks effectively. This includes maintaining an inventory of ICT assets, conducting regular risk assessments, and implementing mechanisms to detect, report, and address risks in real-time. Specific requirements include:

• Establishing a documented ICT risk management framework.
• Conducting risk assessments at least annually or whenever significant changes occur.
• Reporting significant ICT-related incidents to regulatory authorities within specified timelines.
• Ensuring alignment of ICT risk management practices with overall operational risk strategies

📚 Related: DORA Maturity Assessment

Core Elements of ICT Risk Management under DORA

1. Identification of ICT Risks (Article 5)

Identification involves creating a clear inventory of ICT assets and evaluating their associated risks. This process lays the foundation for effective risk management, as organizations cannot address risks they haven’t identified.

The process typically begins with enterprise architects and IT teams to document all ICT assets and their interdependencies. For example, mapping how a cloud-based payment processing system interacts with internal databases and third-party APIs can reveal potential weak points.

Comprehensive risk identification enables organizations to predict how incidents could propagate across their infrastructure and prioritize areas needing immediate attention.

Key Activities:

• Mapping ICT Assets: Enterprise architects collaborate with IT teams to document critical systems, applications, and data flows using tools like SAP LeanIX. For example, a financial institution might map dependencies between payment processing systems and third-party cloud services to pinpoint vulnerabilities.
• Assessing Threat Vectors: Security teams analyze internal and external factors, such as outdated software, insider threats, and emerging cyber risks, to develop a holistic threat landscape.
• Engaging Stakeholders: Compliance officers coordinate with IT and risk managers to align risk identification efforts with regulatory requirements. Regular cross-functional workshops can help uncover risks that might be overlooked in siloed processes.

The outcome of this process is a detailed, real-time inventory of ICT assets and potential vulnerabilities, which serves as the foundation for subsequent risk assessments and mitigation strategies.

📚 Related: Application Portfolio Management

2. Risk Assessment and Analysis (Article 6)

Risk assessment evaluates the likelihood and impact of identified threats, prioritizing those that pose the greatest risk to operational continuity and compliance. This process requires a structured approach to ensure consistency and transparency.

Using frameworks like ISO 27005 or NIST SP 800-30, risk managers evaluate how each identified risk could affect operations, compliance, and customer trust. For instance, assessing the impact of a potential DDoS attack on an online banking platform might involve quantifying customer access disruptions, financial losses, and reputational damage.

In this stage, collaboration between IT teams, compliance officers, and business leaders ensures that assessments consider both technical and operational perspectives.

Key Activities:

• Framework Adoption: Risk managers use frameworks like ISO 27005 or NIST SP 800-30 to standardize assessments. For instance, these frameworks can help quantify the impact of a potential data breach on customer trust and regulatory compliance.
• Categorizing Risks: Risks are classified by severity, enabling organizations to focus on high-impact areas. A practical example includes prioritizing threats to core banking systems over low-priority internal tools.
• Stakeholder Involvement: IT teams, compliance officers, and senior management collaborate to validate risk assessments and align mitigation strategies with business objectives.

The outcome of risk assessment is a prioritized list of risks, enabling organizations to allocate resources effectively and develop tailored mitigation strategies.

📚 Related: Application Criticality Assessment

3. Mitigation and Control Implementation (Article 7)

Mitigation focuses on reducing the likelihood or impact of identified risks through a combination of technical controls, procedural safeguards, and cultural shifts.

Technical measures might include deploying advanced firewalls, encryption protocols, and endpoint protection solutions to safeguard critical assets. For instance, introducing multi-factor authentication can significantly reduce the risk of unauthorized access to sensitive systems.

Simultaneously, compliance officers establish clear policies, such as access management protocols, that guide employee behavior and reinforce security measures.

Key Activities:

• Implementing Technical Controls: IT teams deploy firewalls, intrusion detection systems, and encryption to safeguard critical systems. For example, a financial institution might use multi-factor authentication to protect customer accounts.
• Establishing Policies: Compliance officers develop access control and incident response policies aligned with DORA. Policies are regularly reviewed and updated to reflect evolving threats.
• Testing Controls: Security teams conduct penetration testing to validate control effectiveness. For example, testing email filters against phishing simulations can uncover gaps in protection.

The outcome is a layered defense strategy that combines technology, processes, and awareness to address risks effectively, ensuring both preventive and responsive measures are in place.

4. Continuous Monitoring and Reporting (Article 8)

Continuous monitoring ensures risks are detected and addressed in real time, minimizing disruptions. Reporting mechanisms provide transparency to regulators and internal stakeholders.

Using tools like SIEM platforms, IT teams can track system activity and receive automated alerts for suspicious behavior, such as unauthorized login attempts or unusual data transfer volumes.

Monitoring systems integrate with governance dashboards to provide compliance officers with visibility into risk metrics, control performance, and system health.

Key Activities:

• Deploying Monitoring Tools: Tools like SIEM platforms continuously track system activity, flagging anomalies for investigation. For instance, monitoring spikes in network traffic can help identify potential DDoS attacks.
• Automating Reporting Workflows: Compliance officers use tools like SAP Signavio to streamline incident reporting, ensuring timely communication with regulators.
• Regular Reviews: IT teams conduct periodic reviews of monitoring systems to ensure they remain effective against new threats.

The outcome of continuous monitoring is enhanced situational awareness, enabling organizations to act quickly and decisively in response to potential threats, while maintaining transparency for regulatory compliance.

5. Risk Mitigation Plans and Recovery Strategies (Articles 9–10)

Developing and testing risk mitigation plans and recovery strategies is critical to minimizing the impact of disruptions.

Mitigation plans typically outline step-by-step actions for addressing specific risks, while recovery strategies focus on restoring affected systems and services. For example, a disaster recovery plan for a ransomware attack might include isolating the affected systems, restoring data from backups, and conducting post-incident forensic analysis.

Business continuity plans provide an overarching framework to maintain operations during disruptions, defining recovery time objectives (RTOs) and recovery point objectives (RPOs).

Key Activities:

• Defining Recovery Objectives: IT and business continuity teams establish recovery time objectives (RTOs) and recovery point objectives (RPOs) for critical systems. For example, a financial institution may set an RTO of 30 minutes for its payment processing system.
• Testing Recovery Plans: Disaster recovery tests simulate various scenarios, such as ransomware attacks, to validate plan effectiveness. Teams document findings and refine strategies accordingly.
• Engaging Vendors: Third-party vendors are included in recovery planning to ensure seamless integration of external services during disruptions.

ICT Risk Management Tools and Technologies

• Enterprise Architecture Platforms (e.g., SAP LeanIX): Enable organizations to map their IT landscapes, visualize dependencies, and identify vulnerabilities in critical systems.
• Monitoring and Analytics Systems (e.g., SIEM): Provide real-time visibility into ICT environments, enabling rapid detection and response to anomalies.
• Process Optimization Tools (e.g., SAP Signavio): Streamline workflows and ensure alignment of ICT risk management processes with regulatory requirements.
• Resilience Testing Platforms: Facilitate simulations like TLPT to validate the effectiveness of risk mitigation measures and disaster recovery plans.
• Risk Assessment Frameworks: Leverage ISO 27005 or NIST SP 800-30 to standardize the risk assessment process and ensure consistent evaluations.

Most Common Challenges

1. Fragmented ICT Environments: Legacy systems and siloed processes often hinder comprehensive risk management. A financial institution with multiple unconnected databases, for instance, may struggle to identify data flow vulnerabilities.
   Solution: Consolidate ICT systems and leverage tools like SAP LeanIX to create a unified view of the ICT landscape.
   
   
2. Rapidly Evolving Threats: The speed of technological advancements introduces new vulnerabilities faster than traditional processes can address. For example, emerging AI-driven cyber threats require constant vigilance.
   Solution: Implement continuous monitoring tools like SIEM systems and regularly update risk management strategies to reflect new threats.
   
   
3. Limited Resources: Budget constraints and staff shortages often lead to gaps in risk management frameworks. Smaller financial institutions may lack dedicated teams for ICT risk management.
   Solution: Prioritize high-impact risks and invest in automation to streamline processes. Outsourcing specific functions, such as penetration testing, can also help address resource gaps.
   
   
4. Vendor Risks: Third-party providers can introduce vulnerabilities, especially if their systems are not compliant with DORA.
   Solution: Conduct thorough due diligence and monitor vendor compliance using third-party management tools. Regular TLPT exercises can test vendor resilience.

Best Practices

• Establish Clear Ownership: Assign dedicated roles for ICT risk management, such as a Chief Information Security Officer (CISO), to ensure focused oversight.
• Leverage Advanced Tools: Use EA tools for DORA to map dependencies and monitor risks in real time. Monitoring tools like SIEM can provide actionable insights into system vulnerabilities.
• Conduct Regular Training: Train employees on ICT risks and response protocols. For example, simulated phishing exercises can help employees recognize and respond to cyber threats.
• Foster Cross-Departmental Collaboration: Align IT, risk, and compliance teams to build a unified approach to ICT risk management. Joint workshops can ensure everyone understands their role in mitigating risks.
• Integrate DORA Compliance into Business Strategy: Treat compliance not as a box-ticking exercise but as an opportunity to enhance resilience and operational efficiency.