DORA and ICT Incident Notification: A Digital Big Brother for Banking?

The entry into force of DORA (Regulation (EU) 2022/2554) has marked a turning point in the regulatory landscape of cybersecurity in the financial sector. This new legal framework, designed to strengthen the digital operational resilience of financial entities, raises a crucial debate: Is greater centralization in the notification of cyber incidents necessary?

The Current Scenario: A Mosaic of Notifications

Until now, financial entities have been notifying cybersecurity incidents to their respective national competent authorities. While this system functions, it presents certain limitations. Duplication of reports, lack of a global vision, and potential delays in response are some of the identified drawbacks.

The Proposal for Centralization: A Single European Hub?

DORA proposes exploring the possibility of centralizing incident notification through a single European hub. This solution, although ambitious, promises multiple benefits:

• Greater efficiency: Unification of processes and reduction of administrative burden for entities.
• Better risk analysis: Ability to identify patterns and trends at the European level, facilitating early detection of threats.
• Faster response: More effective coordination among authorities and a more agile response to large-scale incidents.

Implications and Challenges:

A Balancing Act However, centralization poses significant challenges:

• Privacy: The concentration of large volumes of sensitive data in a single point raises concerns about privacy protection.
• Administrative burden: Implementing a new notification system will require significant investments from financial entities.
• Competencies: It could generate tensions between national and European authorities regarding their competencies and responsibilities.

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DORA: Impact on Transparency, Investor Protection and Governance

DORA introduces a series of measures aimed at increasing transparency in the financial sector, both for investors and for the competent authorities.

A Digital Big Brother?

The metaphor of the “Digital Big Brother” reflects the fears of some experts and citizens. The centralization of information could lead to greater control and surveillance over financial activities. It is essential to establish robust safeguards to ensure the protection of fundamental rights and prevent the abuse of power.

Conclusions and Recommendations

The centralization of cyber incident notification is an attractive proposal that offers multiple benefits. However, it is necessary to address the challenges and ensure that it is implemented transparently and respectfully of privacy.

To advance in this direction, the following recommendations are proposed:

• Thorough risk assessment: Conduct a detailed analysis of the risks associated with centralization, both technical and legal.
• Privacy protection: Establish robust security measures to ensure data confidentiality.
• Transparency and accountability: Ensure that the system is transparent and that authorities are accountable for their management.
• Involvement of all stakeholders: Engage all interested parties in the design and implementation process of the new system.

The centralization of cyber incident notification represents an important step towards a more secure and resilient financial system. However, it is crucial to find a balance between the need for security and the protection of privacy.

What do you think? Are you in favor of or against centralization?

Here is a video we have made on the same subject, in case it is of interest to you:

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DORA: The New Paradigm in ICT Incident Reporting for Financial Entities