What You Need to Know About DORA Regulatory Compliance for Financial Applications

The Digital Operational Resilience Act (DORA) is changing the cybersecurity and regulatory compliance landscape for financial institutions in the EU. In effect, DORA is now binding, with regulators shifting from guidance to active enforcement. For developers building or maintaining financial applications, understanding DORA’s requirements and how to meet them is essential.

In this post, we’ll break down what DORA is, why it's important and what it means for developers. You'll also get a glimpse on how to meet the regulatory requirements with your enterprise Java applications. 

What Is DORA and Why Should Developers Care?

DORA is a EU regulation aimed at ensuring financial entities can withstand and recover from ICT-related disruptions. In plain terms: if you’re building applications for a financial service provider, bank or fintech company, your code, runtime and deployment practices must now meet new standards for resilience, transparency and incident response. As DORA applies to everything from uptime and data integrity to monitoring and secure logging, the regulation fundamentally changes how financial applications must be designed, built and maintained, with direct consequences for both technical teams and the organizations they support. Failing to comply can mean severe penalties and loss of trust.

Why is DORA needed and why is it so important to protect applications used by financial organizations?

Why DORA?

The Scale of the Challenge in the Financial Sector

Over the past decade, financial institutions have become deeply dependent on digital technologies to deliver their services, manage data and interact with customers. This digital transformation has brought enormous benefits in terms of efficiency and accessibility, but it has also created new vulnerabilities and risks that traditional financial regulations were not designed to address. In particular, the financial sector alone fights off a staggering 141% more high-severity vulnerabilities per app compared with other industries. 

In addition, the first sector-specific analysis of cyber threats targeting the European finance sector from the European Union Agency for Cybersecurity (ENISA) highlights critical statistics across banking and financial institutions. Key findings from incidents that took place from January 2023 to June 2024 include:

• Banks Are the Primary Target: European credit institutions were affected in 46% of reported incidents, the highest among all financial entities. Public finance-related entities followed, with 13% of cases.

• Data Breaches for Financial Gain: 39% of data breach incidents targeted banks. Threat actors exploited vulnerabilities to commit fraud, triggering financial losses, reputational damage, and potential regulatory penalties. 

• Malware Impact: Banking trojans and spyware enabled credential theft and device compromise. Of the malware cases reported, 36% affected banks.

• Supply Chain Attacks on Financial Services: Third-party breaches—often involving ransomware or data leaks—exposed sensitive financial data and disrupted operations within banking environments.

These findings clearly demonstrate that the European banking sector remains a prime target for cyber threats. DORA was introduced as a direct response to the rapidly evolving digital landscape in the financial sector and the rising tide of cyber threats that accompany it. In effect, the regulation's mandates for risk management, incident reporting and third-party oversight are essential for building operational resilience and safeguarding the financial system.

The Impact of Cyber Threats on Financial Institutions

Cyber incidents in the financial sector have broad and complex consequences, affecting operational integrity, financial health, regulatory compliance and customer trust. Key consequences include:

• Operational Disruption: Operational disruption is the most frequent outcome. It  leads to halted transactions, delayed financial services and customer inaccessibility. These incidents result in financial losses, reputational harm and reduced customer confidence.

• Exposure and Sale of Sensitive Data: Confidential customer and corporate data can be accessed and sold, often on the dark web, fueling identity theft and financial fraud.

• Financial Loss: Stolen funds, ransom payments and incident response costs are some of the most common direct financial losses that institutions can experience as a result of cyberattacks. Indirect impacts include regulatory fines, increased insurance costs and reputational harm.

• Fraud and Large-Scale Financial Crime: Organizations and individuals can be exposed to sophisticated fraud schemes, sometimes linked to organized crime or state-sponsored actors.

• Reputational Damage: Reputational harm is a secondary yet severe consequence. Loss of customer data or service availability can result in long-term brand damage and customer attrition.

The far reaching issues that banks and financial institutions can face as a result of a cyber attack make strong operational resilience a must for the applications used within the sector. Thus, developers should develop and update their solutions accordingly. Knowing what tools, technologies and capabilities to look for is extremely beneficial. 

Steve Millidge, CEO at Payara Services, comments: “As financial institutions adapt to DORA's stringent resilience standards, it's critical to recognize that middleware represents a key element to build robust, compliance cybersecurity measures. Securing the application runtime layer ensures that the applications and systems organizations depend on are simultaneously performant and trustworthy. By partnering with a customer-centric vendor that is at the forefront of middleware security, such as Payara Services, IT teams can confidently align with evolving regulatory requirements while strengthening the resilience of their infrastructures.”

Get the Guide: DORA Compliance for Financial Firms

Want to go deeper or share key insights with your manager? We created a free whitepaper for you. It covers data protection legislation and standards for financial institutions as well as how to align your systems with DORA. The document also looks at how Payara Platform Enterprise can help development teams working on enterprise Java application for fintech and other key software as well as how it can help C-suite professionals meet regulatory requirements.

Download your free copy now to drive DORA compliance and protect your enterprise Java applications.