The European Union has introduced two major cybersecurity regulations: DORA and NIS 2. These new laws are set to transform digital security practices across Europe. This article explores the key aspects of DORA and NIS 2, comparing their similarities, differences, and potential impacts on businesses both inside and outside the EU.
What are DORA and NIS 2?
DORA, the Digital Operational Resilience Act, focuses on strengthening cybersecurity in the EU's financial sector. It aims to ensure that financial entities can effectively handle ICT-related disruptions and threats. DORA goes beyond simple compliance, emphasizing the need for robust operational resilience in financial services.
NIS 2 is the updated version of the Network and Information Security Directive. It has a broader scope, aiming to improve cybersecurity across various critical sectors of the EU's economy and society. NIS 2 addresses the limitations of its predecessor and expands its reach to meet new digital challenges.
While both regulations aim to enhance cybersecurity, they differ in their approaches. DORA specifically targets the financial industry with tailored measures, while NIS 2 sets broader standards for a wide range of sectors, including energy, transport, healthcare, and digital infrastructure.
Legal aspects and implementation dates
A key difference between DORA and NIS 2 is their legal status. DORA is a regulation, which means it will apply directly across all EU member states without need for national adaptation. This ensures consistent implementation throughout the EU.
NIS 2, as a directive, requires each EU member state to incorporate it into their national laws. This process allows for some flexibility in implementation, which may lead to slight variations across countries. However, NIS 2 aims to provide clearer guidelines than its predecessor to minimize inconsistencies.
The implementation schedules for these regulations also differ. DORA becomes enforceable on January 17, 2025, giving financial entities a clear compliance deadline. NIS 2 must be transposed into national law by October 2024, with entity compliance deadlines likely to follow after this date.
Who needs to comply?
DORA applies to a specific range of financial entities, including banks, insurance companies, investment firms, and crypto-asset service providers. It also covers critical ICT third-party service providers, recognizing the interconnected nature of the financial system.
NIS 2 has a broader reach, covering entities across various sectors considered essential or important to the EU's economy and society. This includes energy providers, transport companies, healthcare institutions, and digital infrastructure providers. NIS 2 introduces categories of "essential" and "important" entities, with different obligations for each.
This difference in scope reflects the distinct goals of each regulation. DORA aims to create a comprehensive framework for digital resilience in finance, while NIS 2 seeks to establish baseline cybersecurity standards across multiple critical sectors.
Key requirements
DORA's requirements center around several main areas: ICT risk management, incident reporting, digital operational resilience testing, and managing ICT third-party risk. DORA emphasizes operational resilience, going beyond traditional business continuity planning to ensure financial entities can maintain critical functions during severe disruptions.
NIS 2 covers similar ground but takes a more general approach. It focuses on risk management measures, incident reporting, and supply chain security. NIS 2 also introduces new elements such as basic cyber hygiene practices and encryption use.
Both regulations stress the importance of risk-based cybersecurity. However, DORA's requirements are generally more specific and detailed, reflecting the financial sector's unique needs. NIS 2 allows for more flexibility in implementation across its diverse range of covered sectors.
Effects on non-EU organizations
Although DORA and NIS 2 are EU regulations, they can affect organizations outside the European Union. Non-EU financial institutions operating in the EU or providing services to EU financial entities will need to comply with DORA. This may require significant changes to their ICT risk management practices and operational resilience strategies.
NIS 2 also has implications beyond the EU. Non-EU entities providing services to essential or important entities within the EU may fall under its scope. This means organizations worldwide need to be aware of these regulations and assess their potential impact on their operations.
Conclusion
DORA and NIS 2 represent significant advancements in EU cybersecurity regulation. While they share common goals, their differences in scope, legal nature, and specific requirements make them complementary rather than competing laws. As implementation deadlines approach, organizations both within and outside the EU must carefully evaluate their obligations under these regulations and take steps to ensure compliance. Ongoing attention and adaptation to these evolving cybersecurity regulations will be crucial for businesses across all sectors.
Comments