How to Prepare for Your First DORA Audit

Introduction

In Q3 2025, BaFin issued its first DORA-related enforcement notice. The fine: EUR 450,000. The violation: inadequate ICT third-party risk documentation. This wasn't a one-off incident. It's a stark reminder of the costly consequences for European financial institutions that fail to comply with DORA (Digital Operational Resilience Act) requirements. The stakes are high, with fines ranging up to 6% of annual global revenue. But the impact extends beyond financial penalties. There's also the risk of audit failures, operational disruption, and reputational damage.

As a compliance professional, CISO, or IT leader, you're on the front lines of navigating DORA's complex requirements. This article is your comprehensive guide to preparing for your first DORA audit. We'll dive deep into the core problems, the urgency of compliance, and the concrete steps you need to take to ensure DORA readiness. By the end, you'll have a clear roadmap to minimize risks and avoid the pitfalls that have ensnared many of your peers.

The Core Problem

The reality is that many organizations are woefully unprepared for DORA compliance. This stems from a lack of understanding of the nuances of the regulation and the failure to grasp the full extent of their obligations. At its core, DORA is about operational resilience – ensuring that financial institutions can withstand and recover from operational disruptions.

DORA's scope is broad, covering everything from risk management to ICT third-party risk assessment. Article 4(1) of DORA requires institutions to establish, implement, and maintain adequate and proportionate governance frameworks. This includes a clear risk management process and the appointment of a risk officer.

However, the reality is that many institutions struggle to meet these requirements. According to a recent survey, 45% of European banks have not yet appointed a risk officer. This is a glaring gap in their compliance efforts, leaving them exposed to potential enforcement actions.

Moreover, the cost of non-compliance is steep. Aside from the financial penalties, there's the operational disruption that comes from failing an audit. This can lead to delays in critical projects and the need to divert resources to remediation efforts.

There's also the reputational damage that comes from being flagged as non-compliant by regulators. In a highly competitive market, this can lead to a loss of customer trust and business. In a recent study, 60% of customers indicated that they would be less likely to do business with a financial institution that had failed a regulatory audit.

Why This Is Urgent Now

The urgency of DORA compliance has been underscored by recent regulatory changes and enforcement actions. With BaFin's first DORA-related enforcement notice in 2025, it's clear that regulators are ramping up their scrutiny.

Moreover, there's increasing market pressure to demonstrate compliance. As customers become more aware of regulatory requirements, they're demanding certifications to ensure that their financial partners are operating with the utmost integrity and resilience.

Non-compliance also puts organizations at a competitive disadvantage. Those that fail to meet DORA requirements risk being sidelined by more compliant competitors. This can lead to a loss of market share and a decline in revenue.

The reality is that most organizations are lagging in their DORA readiness. A recent study found that only 30% of European financial institutions have fully implemented DORA's requirements. This leaves a significant gap that needs to be addressed urgently.

In the next section, we'll dive into the concrete steps you need to take to ensure DORA readiness. We'll cover everything from risk management to third-party risk assessment and beyond. By following this roadmap, you'll be well on your way to minimizing risks and navigating your first DORA audit with confidence.

The Solution Framework

Preparing for your first DORA audit can be complex, but by adopting a structured, step-by-step approach, you can ensure a comprehensive response to the regulators' requirements. The following framework serves as your guide:

1. Understanding DORA's Requirements: Begin by familiarizing yourself with the articles of DORA that pertain to your organization. Specifically, focus on Article 28 which outlines the requirements for digital operational resilience, as well as Article 25 that addresses governance and risk management. A deep understanding of these articles will provide a solid foundation for your compliance efforts.

2. Building an ICT Third-Party Risk Management Framework: As seen in the BaFin enforcement notice, inadequate documentation is a common pitfall. Develop a framework that systematically assesses and addresses ICT third-party risks. This should include due diligence processes, ongoing monitoring, and a clear escalation procedure for potential risks.

3. Implementing Robust Risk Assessment Processes: Establish a methodology for identifying, assessing, and prioritizing risks in line with DORA's requirements. This process should be documented and regularly updated to reflect changes in the business environment or technology landscape.

4. Developing and Implementing ICT Incident Management Plans: In accordance with DORA Art. 28(2), create incident management plans that detail the processes for identifying, containing, and remediating ICT incidents. These plans should be tested regularly to ensure they are effective.

5. Maintaining Comprehensive Documentation: Documentation is critical in demonstrating compliance. Ensure that all risk assessments, incident management plans, and third-party risk management activities are properly documented and easily accessible for auditors.

6. Regular Audits and Reporting: Conduct regular internal audits to identify compliance gaps and areas for improvement. This proactive approach will help you address issues before they become significant compliance risks. Additionally, prepare detailed compliance reports to present to regulators.

7. Continuous Improvement and Training: Compliance is not a one-time event but an ongoing process. Implement a continuous improvement program and train staff regularly on DORA requirements to ensure ongoing compliance.

"Good" compliance sees these steps not just as checkboxes but as integral to operational resilience. It involves proactive management, timely risk assessments, and a culture of compliance that permeates the organization.

Common Mistakes to Avoid

While the solution framework provides a roadmap for success, it's equally important to understand the common pitfalls that can lead to compliance failures:

1. Inadequate Documentation: Organizations often fail to maintain comprehensive documentation of their risk assessments and ICT incident management plans. What they do wrong is neglecting to keep updated records, which can lead to fines and reputational damage. Instead, adopt a systematic approach to documentation that aligns with DORA's requirements.

2. Lack of Third-Party Risk Management: Failing to assess and monitor risks associated with third-party providers is a common oversight. Why it fails is the underestimation of third-party risks and their potential impact on the organization. What to do instead is to develop a robust framework for managing third-party risks, including clear service level agreements and regular risk assessments.

3. Insufficient Incident Management Planning: Many organizations do not have comprehensive incident management plans or fail to test them regularly. What they do wrong is assuming that having a plan is enough without ensuring its effectiveness through testing. Instead, develop detailed incident management plans and conduct regular drills to ensure that your team is prepared to respond effectively to ICT incidents.

4. Ignoring Regulatory Updates: Compliance is not static; it evolves with regulatory changes. Organizations that do not stay current with DORA's updates are at risk of non-compliance. What to do instead is to subscribe to regulatory updates and integrate them into your compliance strategy.

5. Neglecting Staff Training: Compliance is not just a management issue; it requires a culture of compliance throughout the organization. Failing to train staff on DORA requirements can lead to non-compliance. Instead, implement regular training programs to ensure that all staff understand their role in maintaining compliance.

Tools and Approaches

The journey to DORA compliance can be supported by a variety of tools and approaches, each with its own advantages and limitations:

1. Manual Approach: The manual approach involves managing compliance tasks using traditional methods like paper-based records and manual tracking. Pros include flexibility and control over the process. Cons include time-consuming tasks and the risk of human error. It works best for small-scale or less complex compliance needs.

2. Spreadsheet/GRC Approach: Using spreadsheets or GRC (Governance, Risk, and Compliance) tools can help manage compliance more efficiently than manual methods. However, limitations include the potential for data silos and the need for regular updates and maintenance. This approach is suitable for medium-sized organizations with moderate compliance needs.

3. Automated Compliance Platforms: Platforms like Matproof, which are built specifically for EU financial services, offer a more comprehensive solution. They automate policy generation, evidence collection, and endpoint compliance monitoring, reducing the risk of human error and saving time. When selecting an automated platform, look for features like AI-powered policy generation, automated evidence collection, and 100% EU data residency. Matproof stands out due to its focus on EU compliance regulations, including DORA, and its ability to generate policies in German and English, catering to the linguistic needs of the European market.

Automation can significantly streamline compliance processes, but it is not a silver bullet. For instance, while it can automate documentation and evidence collection, human oversight is still crucial for interpreting regulatory changes and making strategic decisions. Automation is most beneficial when it complements a robust compliance strategy, providing the tools to execute that strategy effectively.

In conclusion, preparing for a DORA audit requires a structured approach, understanding common mistakes, and leveraging the right tools. By following the solution framework, avoiding common pitfalls, and choosing the appropriate tools, you can ensure your organization is ready for its first DORA audit and maintains ongoing compliance.

Getting Started: Your Next Steps

Preparing for your first DORA audit is a journey that begins now. Here’s a five-step plan to kickstart your compliance efforts:

1. Understand Your Scope: Begin by reviewing DORA Articles 28 to 30, which outline specific ICT risk management requirements. This will give you an initial understanding of the areas to focus on.

2. Conduct a Preliminary Risk Assessment: Identify and assess existing ICT third-party relationships. Look for potential risks and gaps in documentation, especially under DORA Art. 28(2).

3. Strengthen Documentation: Work on improving current third-party risk management documentation. Ensure it covers all aspects of DORA compliance, including monitoring and reporting.

4. Develop a Compliance Plan: Create a structured compliance plan that outlines specific tasks, deadlines, and responsible individuals for each compliance requirement.

5. Perform Regular Audits: Regularly review and update your compliance documentation to ensure it stays current with evolving regulations.

For additional guidance, refer to the official EU DORA text and BaFin’s guidelines on ICT risk management. When considering whether to handle compliance internally or seek external support, assess your team’s capacity and expertise. If you lack specific DORA knowledge or resources, external help might be beneficial.

A quick win for your compliance efforts? Start mapping your current ICT third-party relationships and risk assessments within the next 24 hours to get a clear view of your starting point.

Frequently Asked Questions

1. What is the main difference between DORA and NIS2 in terms of ICT third-party compliance?
   DORA and NIS2 both emphasize the importance of ICT risk management, but they differ in their focus. While NIS2 primarily targets essential digital services and critical infrastructure, DORA applies to all financial institutions. DORA places a stronger emphasis on third-party risk management, including detailed documentation and ongoing monitoring (DORA Art. 28(2)). Understanding these nuances is crucial for effective compliance.

2. How long should ICT third-party risk management documentation be retained under DORA?
   Under DORA, financial institutions must maintain records for a minimum of five years (DORA Art. 30(3)). This includes all documentation related to ICT third-party risk assessments, due diligence, and monitoring processes. Failure to retain such documentation can lead to penalties, as seen in the first DORA-related enforcement notice where a company was fined EUR 450,000 for inadequate documentation.

3. What is the role of the management body in DORA compliance?
   The management body of a financial institution plays a crucial role in ensuring DORA compliance (DORA Art. 28(4)). They are responsible for overseeing the institution's ICT risk management framework and must approve any third-party risk assessments. Regular meetings and reporting on DORA compliance should be a standard part of their agenda.

4. Can DORA compliance be fully automated using tools like Matproof?
   While automation tools like Matproof can significantly streamline compliance processes, they cannot fully replace human judgment and intervention. Matproof can automate policy generation, evidence collection, and endpoint compliance monitoring, but the final assessment and decision-making should always involve human oversight. This ensures that compliance efforts remain robust and adaptable to changing circumstances.

5. How should we approach third-party risk assessments for cloud service providers?
   Assessing cloud service providers under DORA requires a thorough understanding of their security controls and practices. You must evaluate their compliance with GDPR, NIS2, and SOC 2, among other standards. Additionally, ensure they have a clear incident response plan in place and that they can provide automated evidence of compliance. Regularly review and update these assessments to reflect any changes in their services or security posture.

Key Takeaways

• DORA compliance is a continuous process that requires ongoing attention and regular updates to ICT risk management documentation.
• Understanding the specific requirements of DORA, particularly concerning third-party risk management, is crucial for avoiding fines and enforcement actions.
• The management body plays a key role in overseeing DORA compliance and must be actively involved in the process.
• While automation can streamline compliance efforts, human oversight remains essential to ensure robust and effective compliance.
• Matproof can assist in automating policy generation, evidence collection, and endpoint compliance monitoring, making the compliance journey more manageable.

To get started on your DORA compliance journey, consider reaching out to Matproof for a free assessment of your current compliance posture. Visit https://matproof.com/contact to schedule your assessment and take the first step towards a more secure and compliant financial institution.