EU DORA vs. AUS APRA CPS230

[Max Mirian]

As the financial services sector becomes increasingly reliant on digital technology, operational resilience has emerged as a critical focus for regulators worldwide. The Digital Operational Resilience Act (DORA), adopted by the European Union, and APRA CPS 230 from Australia's financial regulator, APRA (Australian Prudential Regulation Authority), represent two significant regulatory initiatives aimed at strengthening resilience against operational and digital risks.

While DORA primarily targets ICT risks within the financial sector, APRA CPS 230 takes a broader approach to operational risk management. Both frameworks emphasize the importance of managing third-party risks, incident reporting, and business continuity, but their regional contexts and specific requirements lead to distinct regulatory approaches.

How This Comparison helps

Understanding the differences and similarities between DORA and APRA CPS 230 is valuable for global organizations operating across these jurisdictions or planning to expand into new markets. Such a comparison helps:

1. Identify Overlaps and Gaps: Organizations can align compliance efforts, avoiding duplication and ensuring no critical risks are overlooked.
2. Prepare for Multi-Jurisdictional Compliance: Businesses operating in both regions can streamline processes to meet varying regulatory expectations efficiently.
3. Benchmark Regulatory Approaches: Comparing frameworks allows stakeholders to evaluate how different regulators prioritize and address emerging risks like ICT dependencies and third-party relationships.
4. Support Strategic Planning: Insights from the comparison can guide investments in resilience strategies and infrastructure to satisfy diverse regulatory demands.

This analysis provides a structured view of how DORA and APRA CPS 230 address operational resilience, aiding organizations and stakeholders in navigating the complexities of global regulatory compliance.

DORA vs. APRA

DORA (Digital Operational Resilience Act) and APRA CPS 230 (Operational Risk Management) are regulatory frameworks aimed at ensuring operational resilience in financial and critical sectors. They have different scopes and jurisdictions but share some common goals. Here's a comparative analysis:

---

Jurisdiction and Scope

Aspect	DORA (EU)	APRA CPS 230 (Australia)
Jurisdiction	European Union	Australia
Target Entities	Financial entities such as banks, investment firms, payment institutions, and ICT providers critical to financial services.	APRA-regulated entities such as banks, insurers, and superannuation funds.
Sector	Digital operational resilience in financial services.	Broader operational risk management, covering financial services.

---

Key Focus Areas

Aspect	DORA	APRA CPS 230
Operational Resilience	Focuses on ICT risk and digital resilience, including cybersecurity and third-party ICT service providers.	Broad operational risk management, including business continuity and third-party risk.
Third-Party Risk	Establishes guidelines for oversight of critical ICT third-party providers, including mandatory registration.	Requires effective management of material third-party risks, emphasizing contract oversight.
Incident Management	Mandates reporting of major ICT-related incidents to regulators within strict timelines.	Requires notification of APRA for significant incidents but with more flexibility in definitions.
Business Continuity	Requires a robust framework for ICT business continuity and disaster recovery.	Focuses on overall business continuity and recovery, not limited to ICT.
Stress Testing	Encourages testing for digital operational resilience, including penetration testing.	Requires regular testing of business continuity and contingency plans.

---

Reporting and Compliance

Aspect	DORA	APRA CPS 230
Regulatory Reporting	Detailed reporting of ICT incidents and resilience metrics to the relevant EU authorities.	Incident reporting to APRA in line with significant operational disruptions.
Implementation Deadline	Applies uniformly across the EU, with compliance by January 2025.	APRA CPS 230 comes into effect from 1 July 2025.

---

Comparison of Focus

• DORA emphasizes digital and ICT-specific resilience, cybersecurity, and reliance on third-party ICT providers.
• APRA CPS 230 takes a broader operational risk approach, encompassing all types of operational risks, including but not limited to ICT.

Key Differences

1. Scope of ICT Risk Management:

   • DORA has a specific mandate to strengthen ICT risk and digital resilience.
   • APRA CPS 230 covers ICT but as part of a broader operational risk management framework.

2. Incident Reporting Timelines:

   • DORA specifies strict deadlines (e.g., 24 hours for initial notification).
   • APRA CPS 230 allows more flexibility in reporting timelines, based on incident significance.

3. Regulatory Authority:

   • DORA is governed by the European Supervisory Authorities (ESAs) and national regulators in the EU.
   • CPS 230 is overseen by APRA.

Conclusion

While both frameworks aim to enhance operational resilience, their approaches reflect the regulatory priorities of their regions. DORA is tailored to address the rising dependency on digital technologies in the EU financial sector. In contrast, APRA CPS 230 offers a more comprehensive view of operational risks, suitable for the diverse operational landscape of Australian financial institutions.