Achieving DORA Compliance: Best Practices for Securing Data in Transit

As digital financial services grow, so do the risks associated with cybersecurity, data breaches, and operational disruptions. The European Union’s Digital Operational Resilience Act (DORA), set to come into force in 2025, is a comprehensive regulation aimed at strengthening the digital resilience of financial institutions and businesses within the EU. Among the many aspects of digital resilience that DORA addresses, protecting data in transit plays a critical role in ensuring compliance with this regulation.

In this blog post, we will explore why safeguarding data in transit is essential under DORA and how it helps businesses meet compliance requirements while protecting sensitive financial information.

Understanding EU DORA Compliance and Its Objectives

DORA’s primary objective is to ensure that financial institutions, including banks, insurance companies, and investment firms, can withstand, respond to, and recover from all types of IT disruptions, including cyberattacks. The regulation establishes a uniform set of rules for risk management, reporting, and compliance.

Among its core pillars, DORA focuses on:

• Risk Management: Financial institutions must implement robust digital operational resilience frameworks, including securing data and systems.
• Incident Reporting: Firms are required to report cyber incidents to relevant authorities.
• Third-Party Risk: Managing risks related to third-party ICT service providers (e.g., cloud services).
• Testing and Audits: Financial entities must undergo regular testing to ensure that their security systems are resilient to operational and cybersecurity risks.

One of the critical aspects of operational resilience under DORA is securing data in transit, which is data actively moving across networks, whether between internal systems, external partners, or customers. This is particularly relevant for financial services, where sensitive personal and financial information is frequently transmitted.

Why Protecting Data in Transit is Critical for DORA Compliance

1. Ensuring the Confidentiality of Sensitive Financial Data

Financial institutions deal with highly sensitive information such as account details, financial transactions, and personal customer data. During transmission, this data is vulnerable to interception, manipulation, or unauthorized access if not properly secured. DORA emphasizes the need to maintain the confidentiality, integrity, and availability of data, making it essential to protect data in transit.

Under DORA, financial entities must ensure that their data management practices secure sensitive financial information during transmission. Encrypting data in transit with solutions such as Certes DPRM ensures that unauthorized actors cannot view or tamper with data, maintaining its confidentiality and integrity.

2. Preventing Man-in-the-Middle (MITM) Attacks

Man-in-the-middle (MITM) attacks pose a significant risk to data in transit. In these attacks, an unauthorized actor intercepts communications between two parties to either steal data or manipulate the transaction. MITM attacks are a common threat in financial services, where cybercriminals aim to intercept sensitive information or alter payment instructions.

DORA mandates that financial institutions protect data from unauthorized access and tampering. This includes securing all data transmissions between systems, third-party providers, and customers. End-to-end encryption of data in transit helps prevent MITM attacks, ensuring that financial data is protected as it travels across networks.

3. Meeting Legal and Regulatory Requirements

The financial industry is already highly regulated, with requirements from GDPR, PSD2, and now DORA adding further layers of compliance. Many of these regulations overlap, particularly concerning the protection of customer data. GDPR already mandates the protection of personal data during transmission, and DORA extends this requirement to encompass operational resilience against cyber threats.

Compliance with DORA means that financial institutions need to integrate cybersecurity practices that ensure data in transit is always protected. Failure to do so could lead to violations not only under DORA but also under other regulations like GDPR, leading to significant fines and penalties.

4. Mitigating Third-Party Risks

DORA emphasizes the need to manage risks associated with third-party IT service providers, such as cloud service providers, payment processors, and outsourced IT services. When data is transmitted between financial institutions and third parties, it is crucial to ensure that it is encrypted and protected during transmission to avoid unauthorized access or leaks.

To comply with DORA’s third-party risk management requirements financial firms must implement secure data-sharing protocols when working with third-party providers. Secure APIs, encryption of data in transit, and audit trails are key to ensuring that third parties handle financial data securely and that firms remain compliant.

5. Proactively Guarding Against Data Breaches

Data breaches not only compromise sensitive customer information but can also disrupt services, damage reputations, and result in significant financial losses. DORA mandates that financial institutions must implement proactive measures to safeguard digital systems and data to ensure continuous service availability and security.

DORA’s focus on operational resilience includes safeguarding data from breaches that could result from cyberattacks on data in transit. Encrypting data in transit reduces the likelihood of a data breach, ensuring compliance with DORA’s requirements for safeguarding customer data and ensuring operational continuity.

6. Strengthening Customer Trust

Protecting data in transit is not only about compliance but also about building trust with customers. Financial institutions that take steps to secure all aspects of their data flow, including data in transit, demonstrate a commitment to customer privacy and security. Certes DPRM is entirely focused on protecting data in transit using quantum techniques and keys that are unique to the customer resulting in highly secure transmission of customer data.

DORA places the customer at the center of its regulatory framework by emphasizing the need to ensure continuous, secure, and trustworthy financial services. By protecting data in transit, financial institutions can meet DORA’s requirements and reassure customers that their sensitive financial information is secure.

Best Practices for Securing Data in Transit to Ensure DORA Compliance

To ensure compliance with DORA, financial institutions should adopt the following best practices for securing data in transit:

1. Implement Strong Encryption Solutions

Always encrypt data in transit using strong encryption solutions such as Certes DPRM. DPRM ensures that even if data is intercepted, it cannot be read or manipulated by unauthorized users. Each separate data flow is individually protected using Quantum-based techniques and the key is changed every hour.

2. Enable End-to-End Encryption (E2EE)

E2EE ensures that data is encrypted at the source and only decrypted at the destination. This prevents any unauthorized interception during the transmission process, whether internally or externally. DPRM can protect the data from its source to destination irrespective if that is as a physical, virtual, container or in the Cloud supplied solution.

3. Regular Security Audits and Testing

DORA requires regular testing of operational resilience measures, including cybersecurity practices. Conduct penetration testing and vulnerability assessments to identify weaknesses in how data is transmitted and ensure compliance.

4. Monitor and Log All Data Transfers

Implement monitoring tools to log and audit all data transfers across your network. This helps detect any suspicious activities or unauthorized access attempts and ensures you can report incidents as required by DORA.

Securing Data in Transit is Key to DORA Compliance

As the financial sector becomes more digitized, protecting data in transit is no longer optional — it’s a regulatory requirement. Under the EU DORA framework, ensuring the confidentiality, integrity, and security of financial data in transit is critical to building a robust and resilient cybersecurity posture. By deploying Certes DPRM to protect data in transit and managing third-party risks, financial institutions can achieve DORA compliance and safeguard their customers’ trust.

For financial institutions operating within the EU, now is the time to assess your data protection strategies and prioritize securing data in transit as a key component of your DORA compliance efforts.

By understanding the importance of protecting data in transit and implementing best practices, your organization will be well-prepared to meet the stringent requirements of DORA and maintain a secure, resilient digital financial infrastructure.

Contact us to find out more about how Certes empowers organizations to navigate complex regulatory landscapes and fortify their defenses against evolving cyber threats.