Top 5 Operational Resilience Challenges for Banks Under DORA

The Digital Operational Resilience Act imposes enforceable obligations on financial institutions across the European Union, requiring them to demonstrate measurable control over third-party risk, incident response capability, and continuous testing of critical systems. Banks that fail to meet these requirements face regulatory penalties, operational disruption, and reputational damage. Compliance demands architectural changes, governance structures, and continuous validation of resilience across people, processes, and technology.

This article examines the five most consequential operational resilience challenges banks face under DORA. It explains how each challenge manifests in real enterprise environments, what regulatory obligations are at stake, and how financial institutions can operationalize resilience through technical controls, governance frameworks, and integrated security platforms that enable defensibility and auditability.

Executive Summary

DORA mandates that banks establish and demonstrate operational resilience across their entire digital ecosystem, including third-party service providers, ICT systems, and sensitive data workflows. The regulation’s five pillars—ICT risk management, incident reporting, digital operational resilience testing, third-party risk management, and information sharing—require banks to implement continuous monitoring, rapid incident response, and evidence-based assurance programs.

The five challenges addressed in this article reflect the operational, technical, and governance gaps that banks must close to meet DORA’s requirements. These include achieving end-to-end visibility into third-party data flows, maintaining audit-ready evidence of ICT controls, executing realistic resilience testing without disrupting production systems, coordinating incident detection and response across fragmented toolsets, and securing sensitive data in motion across external parties.

Addressing these challenges requires architectural convergence, automated evidence collection, and platforms that enforce granular access controls while generating immutable compliance records. Banks must move beyond static compliance documentation to implement continuous validation, real-time monitoring, and integrated security operations that demonstrate ongoing operational resilience.

Key Takeaways

• DORA requires banks to map and monitor every third-party relationship that processes, stores, or transmits sensitive data. Without automated discovery and continuous tracking of data flows, institutions cannot demonstrate compliance or respond effectively to third-party incidents.
• Incident reporting under DORA demands structured evidence collection, standardized classification, and timely notification to regulators. Banks must integrate detection, triage, and reporting workflows to meet strict timelines and substantiate root cause analysis.
• Digital operational resilience testing extends beyond vulnerability scanning to include threat-led penetration testing and scenario-based simulations. Banks must test critical systems under realistic conditions without introducing unacceptable risk to production environments.
• Achieving audit readiness requires immutable records of access, content inspection, policy enforcement, and remediation actions. Manual documentation cannot scale or satisfy DORA’s evidentiary standards.
• Securing sensitive data in motion across third-party channels is essential to operational resilience. Banks must enforce zero trust security principles, content-aware controls, and encryption at every handoff to prevent data exfiltration and unauthorized access.

Challenge 1: Third-Party Data Flow Visibility and Continuous Monitoring

DORA’s third-party risk management pillar requires banks to identify, assess, and continuously monitor every external service provider that touches ICT systems or sensitive data. This obligation extends beyond contract review to operational oversight. Financial institutions must maintain real-time visibility into what data is shared with which third parties, through what channels, under what security controls, and with what level of access. The regulation explicitly requires that banks understand the full chain of subcontractors and assess concentration risk where multiple critical services depend on a single provider.

Most banks struggle with this requirement because they lack centralized visibility into data flows. Sensitive information moves across email, file sharing platforms, secure file transfer protocols, application programming interfaces, and collaboration tools. These channels often operate in silos, each with its own access policies, logging mechanisms, and security postures. When regulators request evidence of third-party data handling practices, teams must manually reconstruct data flows from disparate logs, contract records, and service catalogs.

Real-world scenario: A bank discovers during an audit that customer data has been shared with 47 undocumented subcontractors through a primary cloud provider, creating concentration risk and compliance gaps that require immediate remediation and regulatory notification.

Achieving Comprehensive Third-Party Oversight

To meet DORA’s third-party oversight requirements, banks must implement platforms that centralize control over sensitive data leaving the institution. This means routing all external communications containing regulated data through a unified platform that enforces consistent policy, logs every transaction, and provides a single source of truth for audit and reporting. The platform must perform automatic classification of content, identify sensitive data types such as personally identifiable information or payment card information, and apply appropriate encryption and access controls based on the recipient’s role and the data’s sensitivity.

Continuous monitoring requires real-time telemetry on data volume, direction, classification, and recipient behavior. Banks need dashboards that surface anomalies such as unusual data volumes to a specific third party or access patterns inconsistent with contractual terms. These insights must feed into risk scoring models that prioritize which third-party relationships require immediate review or enhanced controls. When an incident occurs, banks must be able to isolate the affected data flows, identify downstream impact, and demonstrate containment actions within the regulatory reporting window.

How compromised third-party channels can cascade into broader operational disruption becomes evident when a data breach at one vendor exposes credentials or access paths to interconnected systems. Banks must map these dependencies and implement containment strategies that limit blast radius when third-party incidents occur.

Challenge 2: Securing Sensitive Data in Motion Across Third-Party Channels

Operational resilience depends on protecting sensitive data throughout its lifecycle, especially when data moves beyond the institution’s direct control. DORA requires banks to implement controls that prevent unauthorized access, exfiltration, or corruption of data processed by third parties. These controls must extend to every communication channel used to share data externally, including email, managed file transfer systems, collaboration platforms, and application integrations.

Many banks rely on third parties to apply their own security controls, creating blind spots and inconsistent protection. A bank might enforce strong encryption and access controls for data stored in its own systems but have limited visibility or control once data is emailed to a law firm, uploaded to a cloud collaboration platform used by a vendor, or transmitted via an API integration with a payment processor. If a third party experiences a breach or misconfigures access permissions, the bank remains liable under data protection regulations and DORA’s operational resilience requirements.

Real-world scenario: Data exfiltration through third-party channels impacts operational resilience when attackers compromise a vendor’s collaboration platform and use it to systematically extract customer records over several weeks before detection, demonstrating the connection between data security and incident recovery capabilities.

Implementing Zero-Trust Data Protection

Securing sensitive data in motion requires banks to enforce zero trust architecture principles at every handoff point. This means verifying the identity of every recipient, validating that the recipient is authorized to access the specific data being shared, encrypting data in transit and at rest, and continuously monitoring recipient behavior for signs of compromise or misuse. Zero-trust controls should apply regardless of whether the recipient is an employee, contractor, third-party service provider, or automated system.

Content-aware controls enable banks to classify data automatically based on its content, apply appropriate security policies, and enforce restrictions such as watermarking, download prevention, or expiration dates. For example, a file containing customer financial records might be classified as highly sensitive, triggering a policy that requires the recipient to authenticate with multi-factor authentication, restricts forwarding or printing, and automatically revokes access after seven days. These controls operate independently of the recipient’s security posture, ensuring consistent protection even when third parties use less mature security practices.

Banks should implement dedicated platforms that centralize and secure all external data sharing. By routing sensitive communications through a unified Private Data Network, institutions can enforce consistent policy, perform content inspection and data loss prevention scanning, log every transaction for audit purposes, and integrate with threat intelligence feeds to block sharing with known malicious actors or compromised domains.

Challenge 3: Coordinating Incident Detection and Response Across Fragmented Toolsets

DORA’s incident management requirements mandate structured detection, classification, escalation, notification, and recovery processes. Banks must detect incidents quickly, classify them according to severity and impact, escalate to appropriate response teams, notify regulators within specified timeframes, and execute recovery procedures that restore services while preserving evidence. The regulation also requires post-incident reviews that identify root causes, assess control effectiveness, and implement corrective actions.

Many banks operate fragmented security toolsets that generate alerts in different formats, store findings in disparate repositories, and require manual correlation to determine incident scope and severity. Security operations teams spend significant time triaging false positives, reconciling conflicting signals, and coordinating response activities across network security, endpoint protection, identity and access management, and data loss prevention systems. This fragmentation delays detection, slows response, and complicates evidence collection for regulatory reporting.

Real-world scenario: A ransomware attack is detected by endpoint tools but the SIEM doesn’t correlate it with suspicious file transfers detected 3 hours earlier, delaying containment and allowing lateral movement across the network.

Building Integrated Incident Response Workflows

Coordinating incident response requires integration between detection systems, case management platforms, and communication tools. Banks should configure their SIEM platforms to ingest logs from all critical systems, including firewalls, intrusion detection systems, endpoint agents, identity providers, and sensitive data protection platforms. These logs should be normalized into a common schema, enriched with contextual information such as user role and data classification, and correlated using detection rules that identify patterns indicative of compromise or policy violations.

When the SIEM generates an alert, it should automatically create a case in the institution’s ITSM or Security Orchestration, Automation, and Response (SOAR) platform with sufficient context for analysts to begin triage immediately. The case should include the detection rule that triggered the alert, affected assets, impacted users, related events, and recommended response actions. All actions should be logged with timestamps and user attribution so that the institution can produce a complete timeline for regulatory reporting.

Automated playbooks can accelerate response to common incident types. For example, when the SIEM detects anomalous data transfer to an external recipient, a playbook could automatically revoke the recipient’s access, quarantine the transmitted files, notify the data owner and security operations team, and generate a preliminary incident report with details of the detection, containment actions, and next steps. This automation reduces mean time to respond and ensures consistent execution of response procedures.

Integration architecture should follow API-first principles for seamless connectivity, support bi-directional data flows where the Private Data Network sends alerts to SIEM platforms and receives threat intelligence updates, and offer both real-time streaming and batch integration options depending on data volume and latency requirements.

Challenge 4: Evidence Collection and Audit-Ready Documentation for ICT Controls

DORA requires banks to maintain comprehensive documentation of their ICT risk management framework, including policies, procedures, risk assessments, control implementations, and evidence of ongoing effectiveness. Regulators expect this documentation to be current, complete, and readily accessible. During examinations or incident investigations, banks must produce evidence that demonstrates how controls were designed, deployed, tested, and maintained over time. Generic policy statements or point-in-time snapshots are insufficient.

Most financial institutions lack automated evidence collection mechanisms. Compliance teams rely on manual sampling, periodic audits, and attestations from business unit owners. This approach cannot scale to meet DORA’s requirements because it introduces lag, inconsistency, and gaps in coverage. Manual documentation also creates risk during incident response or regulatory inquiries when teams must quickly produce evidence under tight deadlines.

Implementing Automated Evidence Collection

Audit readiness requires banks to instrument every sensitive data transaction with immutable logging that captures who accessed what data, when, through what channel, under what policy, and with what outcome. These logs must be tamper-proof through cryptographic signing, ensuring they are legally defensible and satisfy DORA’s evidentiary standards. Logs should be stored with sufficient retention to support multi-year compliance lookbacks and forensic investigations.

The logging layer must integrate with Security Information and Event Management systems, SOAR platforms, and IT Service Management tools so that evidence flows automatically into incident tickets, compliance reports, and regulatory filings. This integration should leverage standard APIs and webhooks for seamless data exchange.

Beyond raw logs, banks need systems that map technical events to specific regulatory obligations and control frameworks. For example, when a user attempts to share a file containing personal data with an external recipient, the system should log the access request, apply the appropriate policy based on data classification and recipient attributes, enforce encryption using FIPS 140-3 validated cryptographic modules and TLS 1.3 protocols, apply access expiration, and tag the transaction with references to DORA’s third-party risk management and ICT control requirements. This mapping enables compliance teams to generate attestation reports that link control objectives to operational evidence without manual reconstruction.

Challenge 5: Digital Operational Resilience Testing Without Disrupting Production

DORA mandates that banks conduct regular testing of their digital operational resilience, including advanced threat-led penetration testing that simulates real-world attack scenarios. The regulation distinguishes between routine vulnerability assessments and rigorous scenario-based testing designed to validate the institution’s ability to detect, contain, and recover from sophisticated attacks. Banks must test not only technical controls but also the coordination of response teams, the effectiveness of communication protocols, and the integrity of backup and recovery procedures.

The challenge lies in conducting realistic resilience testing without introducing risk to production systems. Banks cannot afford downtime or data corruption caused by overly aggressive testing. At the same time, tests conducted in sanitized lab environments often fail to reveal weaknesses that only manifest under real-world conditions such as latency, load, interdependencies, or human factors.

Real-world scenario: A penetration test reveals that backup systems can be compromised through the same credentials as production systems, highlighting the need for segregated privilege management and independent recovery paths.

Balancing Testing Rigor with System Availability

Effective resilience testing requires clear scoping, phased execution, and built-in rollback mechanisms. Banks should begin by identifying critical business functions and the ICT systems that support them. Testing scenarios should focus on high-impact, high-likelihood threats such as ransomware attacks targeting backup systems, credential compromise leading to lateral movement, or distributed denial of service attacks against customer-facing applications. Each scenario should include defined success criteria, expected detection and response timelines, and predetermined escalation paths.

To minimize production risk, banks can deploy testing environments that replicate production architecture, data flows, and access patterns using anonymized or synthetic data. These environments should include realistic third-party integrations, logging infrastructure, and monitoring tools so that tests generate actionable insights into detection and response capabilities.

Banks should implement phased testing approaches that begin with isolated test environments using production-equivalent architectures. Progressive rollout strategies allow testing of specific components during maintenance windows with automatic rollback capabilities if anomalies indicate unintended production impact. Threat-led penetration testing should be scoped to high-risk attack paths with clear rules of engagement that prevent unintended consequences. Continuous monitoring during tests enables rapid detection of anomalies.

Testing outcomes must feed directly into remediation workflows. When a test reveals a control gap, banks should create a tracked remediation task with assigned ownership, target completion date, and validation criteria. The remediation process should be logged and linked back to the original test finding, creating a closed-loop governance model that demonstrates continuous improvement.

Building a Defensible Operational Resilience Program Under DORA

Operational resilience under DORA is not a project with a defined end date. It’s an ongoing program that requires continuous monitoring, testing, adaptation, and improvement. Banks that treat DORA compliance as a documentation exercise will struggle to satisfy regulators and will remain vulnerable to the operational disruptions the regulation seeks to prevent. Institutions that embed resilience into their architecture, governance, and culture will not only meet regulatory requirements but will also reduce incident frequency and severity, accelerate response and recovery, and build stakeholder confidence in their operational stability.

The five challenges discussed in this article—third-party data flow visibility, securing sensitive data in motion, coordinating incident detection and response, evidence collection for audit readiness, and resilience testing—represent areas where most banks face significant gaps. Closing these gaps requires investment in integrated platforms that provide centralized control, automated logging, real-time monitoring, and seamless integration with existing security and compliance workflows.

The Kiteworks Private Data Network addresses these challenges by providing a unified platform for securing sensitive data in motion. Kiteworks enforces zero trust data protection and content-aware controls on every file, email, and API transaction involving regulated data. The platform automatically classifies content, applies appropriate encryption using FIPS 140-3 validated cryptographic modules and TLS 1.3 for all data in transit, and applies access policies. The platform generates immutable, cryptographically signed audit logs that map to DORA’s compliance requirements and provide tamper-proof, legally defensible records.

By centralizing control over third-party data sharing, Kiteworks enables banks to demonstrate continuous oversight, rapidly detect and contain incidents, and produce audit-ready evidence without manual reconstruction. Integration with SIEM, SOAR, and ITSM platforms ensures that detection signals and compliance events flow seamlessly into existing security operations workflows through API-first architecture supporting both real-time and batch data exchange.

Kiteworks’ FedRAMP High-ready status demonstrates government-grade security controls that meet the most stringent operational resilience standards.

Request a demo now

To learn more, schedule a custom demo to see how Kiteworks addresses the five critical operational resilience challenges under DORA—from third-party data flow visibility to automated incident response—while reducing risk and accelerating regulatory compliance.

Key Takeaways

1. Mandatory Third-Party Oversight. DORA requires banks to map and continuously monitor all third-party relationships handling sensitive data, ensuring real-time visibility and rapid incident response through automated tracking.
2. Structured Incident Reporting. Banks must integrate detection, triage, and reporting workflows to meet DORA’s strict timelines for incident notification and provide structured evidence for regulatory compliance.
3. Realistic Resilience Testing. DORA mandates advanced threat-led penetration testing and scenario-based simulations, requiring banks to balance rigorous testing with minimal disruption to production systems.
4. Audit-Ready Evidence Collection. Achieving compliance under DORA necessitates immutable records and automated logging of access and remediation actions to meet evidentiary standards without manual effort.