DORA Compliance: A FinTech Survival Guide
We’re excited to bring you expert insights from our partners Cyber Alchemy on how to navigate the Digital Operational Resilience Act (DORA), a crucial regulatory shift for the FinTech sector.
Introduction: Why DORA Matters for Fintech
The Digital Operational Resilience Act (DORA) is set to transform how financial services firms manage cybersecurity and operational risks. Designed to enhance the digital resilience of the EU financial sector, DORA introduces strict requirements for IT risk management, incident reporting, and third-party risk oversight. Importantly, even UK Fintech firms without direct EU operations may be indirectly impacted through their supply chains, especially if using US-based ICT providers like AWS or Azure that serve EU financial institutions.
For Fintech organisations, this isn’t just additional regulation—it’s a critical shift in cybersecurity and compliance expectations. With increasing reliance on cloud services, third-party providers, and digital transactions, Fintech firms face unique, ever-present security challenges. Non-compliance with DORA could lead to regulatory penalties, reputational damage, and operational disruptions. This guide breaks down what you need to know and how to stay ahead of the compliance curve.
Understanding DORA: What Fintech Companies Need to Know
DORA applies to banks, Fintech firms, insurance companies, and third-party ICT providers, ensuring they have robust frameworks to manage cyber risks effectively. The regulation is built on five key pillars:
– ICT Risk Management: Firms must establish a comprehensive framework to detect, prevent, and mitigate cyber risks, such as NIST (CSF), 27001, CIS or DORA’s own Regulatory Technical Standards.
– Incident Reporting: Clear criteria define “major incidents” (e.g., impact on over 10% of customers, downtime over 2 hours, economic loss exceeding €100,000). These must be reported within 4 hours of classification.
– Digital Resilience Testing: Firms must conduct “proportionate regular testing”, ranging from basic vulnerability assessments to penetration tests and, for larger institutions, threat-led penetration testing (TLPT).
– Third-Party Risk Management: Comprehensive oversight and contractual clarity are required, especially for cloud and critical third-party vendors.
– Information Sharing: Financial entities are encouraged to collaborate and share threat intelligence to enhance cybersecurity.
Key Aspects of DORA That Are Often Overlook
While many Fintech firms recognise the broad requirements of DORA, they often overlook crucial details that significantly impact compliance and operational resilience.
One major challenge is incident reporting. DORA defines strict thresholds for classifying “major incidents,” requiring firms to report them within 4 hours of classification. Without a structured incident management framework, firms risk non-compliance and operational disruption.
Testing requirements are also frequently misunderstood. While large institutions may need advanced Threat-Led Penetration Testing (TIBER/CBEST), many Fintechs only need regular penetration testing aligned to their risk profile. Understanding these distinctions prevents unnecessary expenses while ensuring compliance.
Third-party risk management is another area often underestimated. Fintechs relying on cloud services (AWS, Azure) or SaaS vendors must ensure their contracts explicitly include DORA compliance clauses. This includes requiring vendors to provide immediate incident notifications, audit rights, and exit strategies to maintain operational resilience.
For UK-based Fintechs, a common misconception is that DORA does not apply post-Brexit. In reality, firms operating in EU markets or servicing clients regulated under DORA must comply. Additionally, the UK is developing its own DORA-equivalent, which will align with EU standards while incorporating broader operational resilience measures.
Finally, cost management is a key concern, particularly for SMEs. Achieving compliance efficiently involves leveraging existing security frameworks (e.g., ISO 27001, NIST CSF, CIS Controls) and adopting a phased compliance strategy, focusing on the highest-risk areas first.
Understanding these nuances ensures Fintechs approach DORA compliance strategically—balancing regulatory obligations with cost-effective, risk-based security enhancements.
The Biggest Compliance Challenges for Fintech Firms
While DORA’s objectives are clear, Fintech firms face several challenges in meeting its requirements:
– Lack of Internal Expertise – Many firms lack dedicated compliance or cybersecurity teams.
– Complex Third-Party Dependencies – Heavy reliance on cloud services and SaaS vendors complicates compliance.
– Incident Response & Reporting – Firms must build real-time monitoring systems to detect, categorise, and report security incidents quickly.
– Security Testing Gaps – Many Fintech firms lack advanced vulnerability management and risk assessment capabilities.
Ignoring these challenges won’t make them disappear. Instead, firms should view DORA compliance as an opportunity to strengthen security and differentiate themselves in the market.
One example of effective DORA compliance implementation comes from our client, an insurance company, that was struggling with fragmented and inconsistent incident reporting. With our help, they developed standardised reporting templates, established a specialised response team, and conducted regular staff training. As a result, they achieved enhanced consistency, faster response times, and improved employee readiness—key factors in meeting DORA’s incident reporting requirements. Their experience highlights the importance of structured incident management to ensure compliance and operational efficiency.
Practical Guidance for UK Fintechs
Regardless of Brexit, UK Fintechs must consider DORA if they:
- Operate or have customers within the EU.
- Use cloud providers (AWS, Azure) serving EU financial institutions.
Additionally, the UK is introducing its operational resilience framework (“UK DORA”) aligned closely with DORA but broader in scope, emphasising overall operational resilience beyond just digital incidents.
Turning Compliance into a Competitive Advantage
Rather than seeing DORA as a regulatory burden, organisations need to leverage it as an opportunity to gain a competitive edge:
- Proactive Compliance = Stronger Reputation – Regulatory readiness builds trust with customers, investors, and regulators.
- Security as a Business Enabler – DORA compliance makes Fintechs more attractive to banks enterprise clients and investors.
- Automation & Smart Vendor Management – Implementing the appropriate security automation tools reduces operational friction and improves compliance efficiency.
A great example of turning compliance into an advantage comes from one of our investment clients, struggling with third-party risk management. Working with us, they conducted comprehensive risk assessments, revised vendor contracts to align with DORA compliance, and implemented continuous monitoring programs. These efforts reduced risk exposure, improved contractual clarity, and ensured long-term compliance. Their approach demonstrates that strong third-party oversight is not just about meeting regulations—it’s about ensuring business continuity and security resilience.
How Cyber Alchemy Helps Fintech Firms with DORA
Navigating DORA compliance can be complex, but Cyber Alchemy offers tailored solutions to help firms strengthen their security posture and meet regulatory requirements:
– Penetration Testing & Resilience Assessments – Helping Fintechs meet DORA’s security testing standards through simulated attack scenarios.
– Third-Party Risk Assessments – Ensuring that vendors and cloud providers align with regulatory expectations.
– Incident Response & Reporting Support – Developing robust incident planning and reporting frameworks.
– ICT Risk Management & Governance – Implementing risk assessment frameworks (ISO 27001, NIST CSF, CIS Controls) and aligning cybersecurity policies, processes, and controls with DORA’s regulatory expectations.
– Training & Awareness Programs – Educating Fintech teams on DORA requirements and cybersecurity best practices.
DORA compliance isn’t just about avoiding penalties—it’s an opportunity to build resilience, earn trust, and future-proof your Fintech business.
Want to ensure your Fintech business is ready for DORA? Get in touch with Cyber Alchemy today via email at bob@cyberalchemy.co.uk.
