Discover the key differences and similarities between DORA regulation and the NIS2 directive. Learn how they impact third-party risk management, compliance requirements, and operational resilience in financial and critical sectors.
The regulatory landscape for cybersecurity and operational resilience is changing rapidly across the EU. Two major frameworks stand at the forefront of this shift: the Digital Operational Resilience Act (DORA) and the NIS2 Directive. These regulations aim to strengthen cyber resilience, manage third-party risk, and protect critical infrastructure, but they differ in scope and approach.
In this article, we will explore:
So, DORA is an act while NIS2 is a directive. What is the difference in terminology?
A directive is a law that sets a goal all EU countries must achieve, but each country can decide how to implement it in their national laws. An act, on the other hand, applies directly in all EU countries without changes.
Thus, DORA is implemented simultaneously across the EU, on January 17 2025, with the same wording. NIS2 will be implemented into various national laws within a certain timeframe.
DORA (Digital Operational Resilience Act) applies mainly to the financial sector. DORA requirements apply to banks, insurance companies, payment providers, investment firms, and other financial organizations regulated by EU financial laws.
DORA also covers critical third-party providers that support financial institutions, like risk management software companies and penetration testing service providers.
Further reading: Checklist for DORA compliance
NIS2 has a broader scope and applies to many different sectors. It targets critical infrastructure providers like energy, transport, healthcare, and water supply (called essential entities). It also applies to important entities, such as manufacturing companies, digital infrastructure providers, and cybersecurity firms.
Unlike DORA, NIS2 is not limited to one sector. Instead, it covers industries that are vital to society's daily functioning.
While DORA and NIS2 apply to different sectors, they share the same key goals:
Further reading: What DORA requires from five different stakeholders
Although DORA and NIS2 share similarities, they also have key differences:
Specific Tools and Requirements: DORA requires financial entities to implement penetration tests and robust ICT risk management frameworks. NIS2, on the other hand, mandates broader security measures and focuses heavily on incident response capabilities.
DORA requires financial organizations to meet specific standards to ensure digital resilience. Organizations must create frameworks to identify, manage, and reduce risks related to digital systems. Regular testing, including penetration tests, must be performed to uncover and address vulnerabilities. Also, DORA compliance requires financial institutions to report significant cyber incidents to their national supervisory authority within strict deadlines.
NIS2 focuses on protecting critical infrastructure from cyber threats. Organizations must regularly evaluate cybersecurity risks and put appropriate security measures in place. Incident reporting is also required, but NIS2 allows more flexibility in how organizations respond. NIS2 highlights the need for contingency plans to maintain essential services during disruptions (business continuity).
While both frameworks include incident reporting, DORA’s requirements are stricter due to its focus on the financial sector and its critical systems.
Further reading: Managing the key compliance challenges of the DORA requirements
DORA and NIS2 both highlight the importance of managing third-party risks but take different approaches.
Under DORA, financial organizations must conduct detailed risk assessments of third-party providers, like cloud vendors and ICT service providers. These critical third parties face direct oversight, including ongoing performance monitoring, regular audits, and stress tests to ensure their resilience.
Under NIS2, managing third-party risks is mandatory, but the requirements are less strict. NIS2 focuses on making sure third parties do not create security risks for critical infrastructure. Organizations are required to assess third-party risks as part of their overall cybersecurity strategy, but they have more flexibility in how they implement these measures.
Key takeaway: DORA’s approach to third-party risk is stricter and more structured, while NIS2 allows for more tailored solutions.
Managing third-party risk under DORA and NIS2 is complex, but software solutions can simplify compliance and improve oversight across organizations.
Under DORA, financial institutions face strict requirements for monitoring ICT third-party providers:
Further reading: The smart solution for DORA compliance
While NIS2 is less prescriptive, it still places significant focus on third-party resilience, particularly for critical infrastructure providers:
Software solutions benefit organizations working under both DORA and NIS2 by reducing manual work, improving documentation, and standardizing third-party oversight. Automating processes saves time and ensures consistency across vendor evaluations, while real-time monitoring enables companies to identify and resolve risks before they grow into larger issues. By strengthening third-party risk management, organizations not only simplify compliance but also enhance operational resilience, leaving more time to focus on growth and innovation.
Does your organization need to comply with DORA or NIS2? At House of Control we have developed solutions to help you comply effectively with both. Contact us today to set up a meeting!