The Multi-cloud Advantage: Leveraging DORA for HSM Payments Infrastructure
In today's rapidly evolving financial landscape, the Digital Operational Resilience Act (DORA) stands as a cornerstone for ensuring the robustness and resilience of financial infrastructure, particularly in the realm of Hardware Security Module (HSM) payments infrastructure.
While DORA covers a broad range of requirements to enhance the digital operational resilience of financial entities, it doesn't specifically mandate the ability to "move between clouds quickly and with ease" in a literal sense. However, the essence of ensuring operational resilience and minimising customer impact in the event of a service provider failure is indeed addressed through several of its provisions.
Let's delve into how financial entities can leverage the multi-cloud advantage to align with DORA regulations and bolster their HSM payments infrastructure.
Adopting a multi-cloud approach provides unparalleled flexibility and service continuity for financial institutions. Multi-cloud gateways empower organisations to utilise HSMs across multiple public and private cloud environments, facilitating dynamic and adaptable cloud infrastructure.
Several key requirements of DORA oblige financial entities to maintain comprehensive digital operational resilience.
Let's explore how each of these aligns with the multi-cloud advantage:
ICT Risk Management Framework: DORA requires financial entities to establish a comprehensive ICT risk management framework. This framework should cover all phases of ICT systems' lifecycle and processes, including the ability to remain resilient in the event of a failure and to swiftly recover and maintain critical functions. Strategies for cloud redundancy, disaster recovery, and the ability to switch or migrate between different cloud services or providers are essential components of this resilience.
ICT Incident Management: Financial entities must have effective ICT incident management procedures in place. This includes mechanisms to detect, manage, report, and respond to ICT-related incidents. By having a robust incident management process, banks and FinTech's can reduce the impact of any one service provider's failure on their operations and customers, potentially by switching to alternative services or providers where feasible.
Digital Operational Resilience Testing: DORA mandates regular testing of digital operational resilience, including scenarios where a cloud service provider fails. This testing ensures that banks and FinTech's are prepared for such events and can execute transitions smoothly to minimise customer impact.
Third-Party Risk Management: The management of ICT third-party risk is a critical component of DORA. Financial entities are required to maintain a register of all information related to contractual relationships with ICT third-party service providers, including cloud services. This provision encourages entities to assess the resilience of their third-party providers and have contingency plans in place, including the ability to move operations between different cloud services if needed.
Outsourcing Oversight: DORA strengthens the regulatory oversight of financial entities' outsourcing arrangements, ensuring contracts with third-party providers allow for data portability and service continuity. Financial entities must ensure they can retrieve their data from the cloud service provider and transition to another provider without undue delay or loss of data integrity.
While DORA does not explicitly state requirements for banks and FinTech's to quickly move between cloud services, its focus on ICT risk management, incident management, resilience testing, third-party risk management, and outsourcing oversight collectively supports the objective of minimising customer impact in the event of a service provider's failure. Financial entities are encouraged to design their ICT infrastructure and manage their relationships with third-party providers in a way that enhances operational resilience, which could include the ability to switch cloud services or providers swiftly and efficiently.
By embracing the multi-cloud advantage and aligning with DORA regulations, financial entities can enhance the resilience and flexibility of their HSM payments infrastructure.
This strategic approach not only ensures compliance but also positions organisations to thrive in an increasingly digital and dynamic financial ecosystem.
For further reading, check out our previous blog which decodes the changing landscape of the Digital Operational Resilience Act and direct and indirect benefits.
