Understanding DORA and NIS2 for Non-Technical Startups

In the rapidly evolving world of cybersecurity, non-technical startups often find themselves navigating complex regulations such as DORA and NIS2. Understanding these regulations is crucial for cybersecurity startups, as they lay the groundwork for compliance and risk management. DORA, or the Digital Operational Resilience Act, and NIS2, the Directive on Security of Network and Information Systems, are two key pieces of legislation that have significant implications for security startups. These regulations aim to strengthen the cybersecurity posture of organizations, including cybersecurity startups, by setting out clear guidelines and requirements. This article aims to demystify DORA and NIS2, providing a comprehensive understanding of these regulations and their impact on the cybersecurity landscape.


Understanding the Cybersecurity Landscape

In our increasingly interconnected world, cybersecurity has emerged as a crucial aspect of business operations. Startups, regardless of their focus, are no exception to this rule. Even if your startup is not tech-oriented, you will likely still have a significant digital footprint. This can include anything from your company’s website, social media presence, and email communications, to the software you use for project management or customer relationship management. Each digital interaction is a potential point of vulnerability that could be exploited by malicious entities.

Cybersecurity, in its simplest terms, is the practice of protecting internet-connected systems from cyber threats. These threats can come in various forms, including data breaches, identity theft, ransomware, or even Distributed Denial of Service (DDoS) attacks. The consequences of such threats can range from loss of customer trust, and financial damages, to regulatory fines and litigation, depending on the severity of the breach.

In the startup ecosystem, the stakes are particularly high. Startups often handle sensitive customer data, which makes them attractive targets for cybercriminals. Moreover, because they are typically focused on growth and product development, startups may overlook cybersecurity, leaving them vulnerable to attacks. This is why understanding the cybersecurity landscape and implementing effective cybersecurity measures are not just good practices, but necessities for startups.

The EU has recognized the importance of cybersecurity and has issued several directives and regulations to ensure a high common level of cybersecurity across the Member States. These regulations set out guidelines and standards that businesses must comply with to protect their digital assets and the data of their customers. Two such directives are the Digital Operational Resilience Act (DORA) and the Directive on Security of Network and Information Systems (NIS2).

Understanding these regulations is crucial for startups operating within the EU, as compliance is not only a legal requirement but can also be seen as a mark of trustworthiness and professionalism by customers and investors.

The Importance of Compliance

Compliance, in the context of cybersecurity, refers to adherence to regulations and standards set forth by governing bodies. Compliance is critical to ensuring the security and integrity of data, protecting against cyber threats, and maintaining trust with customers and partners.

Startups might wonder why compliance is so important. To start with, non-compliance can result in hefty fines and penalties. For instance, under the EU’s General Data Protection Regulation (GDPR), companies can be fined up to 4% of their annual global turnover for non-compliance. Moreover, a lack of compliance can lead to reputational damage. Data breaches can lead to a loss of customer trust, which can be devastating for a startup that is still trying to establish its brand.

Additionally, compliance with cybersecurity regulations can have a positive impact on your startup’s overall operational efficiency. Adherence to regulations often requires the implementation of structured processes and practices that can lead to increased productivity and performance. For example, an incident response plan, which is often required under cybersecurity regulations, can minimize the time and resources spent on responding to a cyber attack.

In the context of DORA and NIS2, compliance is equally important. DORA and NIS2 are significant regulations that enhance the cybersecurity posture of businesses operating in the EU, and compliance with these directives is mandatory. Startups that fail to comply with these directives not only risk the aforementioned fines and reputational damage, but they might also find themselves at a disadvantage when seeking investments, as savvy investors are increasingly aware of the importance of regulatory compliance.

Introducing DORA and NIS2

The Digital Operational Resilience Act (DORA) is an EU regulation that aims to establish a comprehensive framework for digital operational resilience. In essence, DORA is about making sure that firms in the financial sector can withstand, prevent, and mitigate ICT-related disruptions and threats. The goal is to ensure a high level of digital operational resilience across the financial system, which is vital given the increasing reliance on ICT systems and services in this sector. However, DORA’s reach extends beyond just financial entities, impacting a wide range of technology service providers that serve these entities.

The Directive on Security of Network and Information Systems (NIS2) is a revision of the original NIS Directive and is part of the EU’s strategy to create a single cybersecurity market. The directive lays down measures to achieve a high common level of security of network and information systems across the Union. It broadens the scope of the original directive to cover more sectors and also strengthens the security requirements that operators of these systems must meet. It is a cornerstone in the EU’s regulatory approach to cybersecurity, promoting cooperation among Member States and laying down security and incident reporting obligations for companies.

Both DORA and NIS2 are part of the EU’s response to the increasing prevalence and sophistication of cyber threats. Understanding these directives is crucial for startups, not just to comply with legal requirements, but also to create a robust cybersecurity framework that can protect their business from potential cyber threats.

In the following sections, we will delve deeper into what DORA and NIS2 entail, and what it means for startups to be compliant with these directives. We will also explore how these directives contribute to the EU’s larger cybersecurity ecosystem, including the EU’s Cyber Crisis Management Structure, or CyCLONe, which is part of the EU’s effort to create a coordinated response to large-scale cyber incidents and crises.

No matter the size or sector of your startup, it’s clear that navigating the cybersecurity landscape can be complex. However, with a solid understanding of the key regulations and their implications, you can ensure your startup is both compliant and secure. So let’s take a closer look at DORA and NIS2 and what they mean for your startup.

The Digital Operational Resilience Act (DORA)

What is DORA?

The Digital Operational Resilience Act, better known as DORA, is an EU proposed regulation aiming to enhance the digital operational resilience of the financial sector. This act is a response to the increasingly digital nature of the financial industry and the corresponding rise in ICT (Information Communication Technology) related risks. However, DORA’s implications extend far beyond just financial entities. A wide array of technology service providers serving these entities also falls under the purview of DORA, making its understanding vital for many startups.

DORA’s fundamental goal is to ensure that firms in the financial sector can withstand, prevent, and mitigate ICT-related disruptions and threats. This is achieved by promoting a culture of risk management, setting stringent ICT risk management requirements, and establishing clear rules for incident reporting. It also provides for robust testing of entities’ digital operational resilience and promotes cooperation among national supervisory authorities.

Importantly, DORA seeks to harmonize the diverse set of digital operational resilience requirements that currently exist across the EU. This is intended to provide a level playing field and ensure that all firms, regardless of their size or the country in which they operate, follow the same high standards. By creating a single set of rules, DORA also simplifies compliance and reduces regulatory fragmentation, making it easier for startups to understand and adhere to the regulations.

Key Provisions of DORA

DORA outlines several key provisions that directly impact startups, particularly those providing services to the financial sector. These provisions can be broadly divided into a few key areas: ICT risk management, ICT-related incident reporting, digital operational resilience testing, and ICT third-party risk.

Under the ICT risk management requirements, firms are required to take a proactive approach in identifying, assessing, mitigating, and managing ICT risks. This involves implementing robust and comprehensive policies, procedures, and measures, which should be proportionate to the firm’s size, nature, and complexity. For startups, this means that even if you are small, you cannot ignore ICT risk management. Your measures might not need to be as extensive as those of a large corporation, but they need to be appropriate for the risks your firm faces.

ICT-related incident reporting requires firms to establish and implement processes to monitor and report significant ICT-related incidents to the relevant authorities as quickly as possible. The goal here is to ensure that authorities have a clear view of the ICT risk landscape and can take appropriate action when necessary.

When it comes to digital operational resilience testing, DORA introduces the concept of “ICT risk concentrations” and requires firms to consider these when conducting their testing. This means that firms will need to identify areas where a single ICT-related incident could have a significant impact on their operations and ensure these areas are thoroughly tested.

Finally, with regard to ICT third-party risk, DORA mandates firms to manage and monitor the risks associated with their reliance on third-party service providers. This reflects the reality that many firms, including startups, increasingly rely on third parties for their ICT services, and these relationships can introduce new risks that need to be managed.

Compliance with DORA

Compliance with DORA is a crucial aspect of operating within the EU’s financial sector or serving entities within this sector. Achieving compliance requires understanding the regulations, assessing your current practices against these regulations, and then taking steps to close any gaps.

To begin with, startups should assess their current ICT risk management practices.This assessment should be comprehensive and cover all areas of ICT risk, including those outlined in DORA. This can be a complex task, particularly for startups without a background in ICT risk management, and it might be worthwhile to seek expert advice. Once you’ve identified any gaps in your practices, you can then develop a plan to address these.

This plan might involve developing or enhancing existing incident response plans, training staff on these plans, and regularly testing their effectiveness. It’s important to note that incident reporting under DORA is not just about compliance; it also contributes to the larger goal of enhancing the overall resilience of the financial system.

Digital operational resilience testing is another key aspect of DORA compliance. This requires startups to conduct regular testing of their ICT systems and processes to identify potential vulnerabilities. This testing should be proportionate to the startup’s size and complexity, and should focus on areas where a single incident could have a significant impact, known as “ICT risk concentrations”.

Startups should also pay particular attention to managing ICT third-party risk. If your startup relies on third parties for ICT services, it’s important to have robust processes in place to manage and monitor these relationships. This might involve conducting regular audits of your service providers, including their cybersecurity practices, and ensuring you have contingency plans in place in case a service provider experiences an ICT incident.

Compliance with DORA is not a one-time exercise but an ongoing process. This involves regular review and updating of policies, procedures, and measures, as well as continuous monitoring of the ICT risk landscape. Remember, the goal is not just to comply with regulations but to build a robust cybersecurity framework that can protect your startup from potential cyber threats.

Achieving compliance might seem challenging, especially for startups without a deep understanding of cybersecurity. However, by breaking down the task into manageable steps, and seeking expert advice when needed, startups can ensure they are both compliant with DORA and resilient in the face of ICT risks. It’s also worth noting that compliance can bring business benefits, such as increased trust from customers and partners, and could even provide a competitive advantage.

So while DORA compliance might seem daunting, it’s a worthwhile investment that can contribute to the long-term success of your startup. Up next, let’s take a closer look at another important piece of EU cybersecurity regulation: The Directive on Security of Network and Information Systems, or NIS2.

The Directive on Security of Network and Information Systems (NIS2)

What is NIS2?

Building upon the foundational principles of its predecessor, the NIS Directive, the Directive on Security of Network and Information Systems (NIS2) is an ambitious initiative by the European Union to establish a high common level of security of network and information systems across the member states. With the rapid advancement of digital technologies and the growing importance of network and information systems in daily life and economic activities, the NIS2 Directive seeks to provide a comprehensive framework for enhancing the security and resilience of these systems.

The NIS2 Directive expands on the scope of the original NIS Directive by covering a wider range of sectors, including digital service providers, such as online marketplaces, online search engines, and cloud computing services. Therefore, it isn’t just the large corporations that are subject to these regulations, but also startups that provide digital services or operate in the sectors covered by the directive.

The revised directive also strengthens the security requirements that operators of these systems must meet, placing a greater emphasis on risk management and introducing stricter incident reporting obligations. All of this is aimed at fostering a culture of security across the EU, where all players, big and small, contribute to the overall resilience of the network and information systems.

Key Provisions of NIS2

At the heart of the NIS2 Directive are several key provisions that affect startups, including those in the digital services sector. These provisions aim to ensure that all operators of essential and important services take appropriate and proportionate security measures to manage the risks posed to the security of networks and information systems.

One of the major changes in NIS2 compared to the original NIS Directive is the expanded scope. While the original directive focused on operators of essential services in sectors such as energy, transport, banking, and healthcare, the revised directive also includes a number of additional sectors, such as postal and courier services, waste management, and digital infrastructure. This means that many more companies, including startups, could find themselves subject to the directive’s requirements.

The NIS2 Directive also strengthens the security and incident reporting requirements. Companies covered by the directive are required to take appropriate and proportionate technical and organizational measures to manage the risks posed to the security of networks and information systems. They are also required to notify the competent authority or the Computer Security Incident Response Team (CSIRT) of any incident having a significant impact on the continuity of the services they provide.

Furthermore, the NIS2 Directive promotes a culture of risk management and encourages the implementation of information security management systems. This is particularly relevant for startups, as it encourages them to think strategically about their information security practices, rather than treating security as an afterthought or a box-checking exercise.

Compliance with NIS2

For startups falling under the purview of the NIS2 Directive, compliance with the directive is a legal obligation, but it also represents an opportunity to enhance the security and resilience of their operations. The journey towards compliance begins with understanding the requirements of the directive and how they apply to your startup.

The first step towards NIS2 compliance is to conduct a risk assessment. This involves identifying the network and information systems your startup relies on, assessing the risks to the security of these systems, and understanding how these risks could impact the continuity of your services. The risk assessment should be comprehensive and cover all aspects of your operations, including your supply chain and any third parties you rely on.

Once you have a clear understanding of the risks, the next step is to implement appropriate and proportionate security measures to manage these risks. This could involve technical measures, such as encryption and secure configuration, as well as organisational measures, such as policies and procedures for managing access to your systems, incident response plans, and staff training. Remember, security is not a one-time task, but an ongoing process that involves continuous monitoring, regular testing, and periodic reviews and updates.

Incident reporting is another key aspect of NIS2 compliance. If your startup experiences an incident that has a significant impact on the continuity of your services, you are required to report this to the competent authority or the CSIRT. The details of what to report and the timeframe for reporting will depend on the specific requirements of the country in which you operate. However, in general, the report should provide enough information for the authority to understand the nature of the incident, its impact, and the measures taken to address it.

As with DORA, compliance with NIS2 is not just about meeting regulatory requirements. It’s also about building a culture of security that permeates every aspect of your startup. This involves fostering an environment where security is everyone’s responsibility, from the CEO to the newest employee. It also means being proactive, not just reactive, and constantly looking for ways to improve your security posture.

Compliance with NIS2 might seem like a daunting task, especially for non-technical startups. However, with the right approach and the right support, it’s a manageable and worthwhile endeavor. By understanding the requirements of the directive, implementing appropriate security measures, and fostering a culture of security, startups can not only achieve compliance but also enhance their resilience, build trust with their customers, and contribute to the overall security of network and information systems in the EU.

Next, let’s explore the practical implications of DORA and NIS2 compliance for startups. We’ll look at what these regulations mean in the real world, and how they can benefit your startup.

Practical Implications of DORA and NIS2

Real-World Impact

Now that we’ve established what DORA and NIS2 are and what they require, let’s delve into the real-world impact of these regulations on startups. By now, it should be clear that these regulations aren’t just theoretical concepts. They translate into concrete actions that startups need to take and have tangible effects on how startups operate.

Consider the requirement for incident reporting under both DORA and NIS2. In practice, this means that startups need to have mechanisms in place to detect incidents, assess their impact, and report them to the relevant authorities in a timely manner. This could involve implementing monitoring systems, developing incident response plans, and training staff on how to respond to incidents.

Similarly, the requirement for risk management under both regulations means that startups need to conduct regular risk assessments and implement appropriate measures to manage identified risks. In the real world, this could involve actions like encrypting sensitive data, implementing multi-factor authentication, conducting regular security audits, and even hiring a dedicated information security officer.

Furthermore, these regulations have implications for the relationships between startups and their service providers. For instance, if a startup relies on a third-party provider for IT services, it needs to ensure that this provider also complies with the relevant cybersecurity regulations. This might involve conducting due diligence on the provider’s security practices, including them in the startup’s risk assessments, and potentially even renegotiating contracts to include specific security requirements.

Benefits and Challenges

Compliance with DORA and NIS2 is not without its challenges, especially for startups with limited resources and without a deep understanding of cybersecurity. These challenges can range from the financial cost of implementing security measures and the time investment required for compliance activities, to the potential business disruption caused by implementing new processes and systems.

However, despite these challenges, compliance with these regulations brings with it several benefits. Firstly, it helps startups to build robust cybersecurity frameworks that can protect them from cyber threats. This is not just a regulatory requirement, but also a business necessity in today’s digital age where cyber threats are a real and present danger.

Secondly, compliance can help startups to build trust with their customers. By demonstrating that they take cybersecurity seriously and are committed to protecting their customers’ data, startups can differentiate themselves in a competitive market and potentially even gain a competitive advantage.

Thirdly, compliance can open up new business opportunities. For instance, some customers, particularly in sensitive sectors like finance or healthcare, might require their service providers to comply with certain cybersecurity regulations as a condition of doing business. By achieving compliance, startups can access these markets and expand their customer base.

Finally, the process of achieving compliance can help startups to improve their overall business practices. For instance, the requirement to conduct regular risk assessments can help startups to identify and manage not just cybersecurity risks, but also other business risks. Similarly, the requirement to have incident response plans in place can improve startups’ overall resilience and ability to respond to any business disruption, not just cyber incidents.

Overcoming Compliance Challenges

While the benefits of compliance are clear, the challenges can seem daunting. However, they are not insurmountable. With the right approach and the right support, startups can overcome these challenges and achieve compliance.

One key strategy is to break down the compliance process into manageable steps. Instead of trying to achieve compliance all at once, startups can tackle one requirement at a time. They can start by identifying the most critical or high-risk areas, then progressively address the other areas.

Startups can also leverage the wealth of resources available to them. These could include guides and toolkits published by regulatory authorities, online courses and webinars, cybersecurity forums and communities, and consulting services from cybersecurity experts.

In fact, many startups find it beneficial to partner with a cybersecurity consultant or firm. These experts can provide invaluable advice and support throughout the compliance process, from conducting initial risk assessments to implementing security measures and preparing for audits. They can also provide training to staff, helping to foster a culture of security within the startup.

However, it’s important for startups to choose their cybersecurity partner carefully. They should look for a partner who has experience with the specific regulations they need to comply with, understands the unique challenges faced by startups, and can provide tailored solutions that fit the startup’s needs and resources.

Moreover, startups should not view compliance as a one-time task, but as an ongoing process. Cyber threats are constantly evolving, and so too are cybersecurity regulations. Startups need to stay informed about the latest threats and regulatory changes, regularly review and update their security measures, and conduct periodic audits to ensure continued compliance.

In the next section, we’ll look at the future of cybersecurity regulations and how startups can stay ahead of the curve.


Recap of DORA and NIS2

In this article, we delved into the world of cybersecurity regulations, focusing on the Digital Operational Resilience Act (DORA) and the Directive on Security of Network and Information Systems (NIS2). Both regulations aim to strengthen the cybersecurity posture of the European Union, ensuring a high common level of cybersecurity across the Member States.

DORA, geared towards financial entities, focuses on fostering digital operational resilience, while NIS2, an upgrade to its predecessor NIS Directive, broadens the range of businesses it applies to and strengthens security requirements.

We discussed the key provisions of these regulations, from risk management and incident reporting to testing and continuous improvement. We also highlighted the importance of compliance and the potential ramifications of non-compliance, which can include hefty fines and reputational damage.

The Importance of Compliance Reiterated

To reiterate, compliance with DORA and NIS2 is not just about avoiding penalties; it’s about protecting your startup from cyber threats, fostering trust with your customers, and ensuring the smooth operation of your business.

Compliance can be a complex process, especially for non-technical startups, but with the right approach and the right support, it is achievable. Startups should view compliance as an ongoing process and embrace a proactive approach to cybersecurity, regularly reviewing and updating their security measures to stay ahead of the curve.

The Future of Compliance

Looking ahead, the cybersecurity landscape and the regulations that govern it are set to continue evolving. We can expect future changes in cybersecurity laws to focus on emerging areas such as cloud security, artificial intelligence, and the Internet of Things (IoT).

Startups must stay informed about these changes and be prepared to adapt their compliance strategies accordingly. They should aim to exceed the minimum requirements of regulations and should consider seeking external help from cybersecurity consultants to navigate the changing landscape.

In conclusion, cybersecurity compliance is not just a legal requirement for startups; it’s a crucial aspect of their operational resilience and business success. By understanding and adhering to regulations like DORA and NIS2, startups can enhance their security, build trust with their customers, and ensure their continued growth and success in an increasingly digital world.


Final Thoughts

Cybersecurity is no longer an option; it’s a necessity in our digital era. For startups, navigating the intricate web of cybersecurity regulations can be daunting, but it’s an essential part of doing business in today’s world.

Regulations like DORA and NIS2 might seem intimidating, but they are designed to help businesses protect themselves and their customers. Compliance isn’t just about ticking off a checklist; it’s about building a resilient startup that’s prepared for the digital challenges of the present and the future.

Encouragement for Startups

Startups, remember that every journey begins with a single step. The world of cybersecurity might seem vast and complex, but don’t be discouraged. Start with understanding the regulations that apply to you, and take it one step at a time.

Don’t hesitate to seek help when you need it. There are plenty of resources available, from online guides and forums to professional cybersecurity consultants. You’re not alone on this journey, and there are many who are ready and willing to help.

Call to Action

Start your cybersecurity journey today. Whether it’s reading up on DORA and NIS2, conducting a risk assessment, or reaching out to a cybersecurity consultant, take that first step.

Remember, cybersecurity isn’t just about protecting your startup; it’s about ensuring its success. So, embrace the challenge, and turn cybersecurity from a hurdle into an advantage.

In our next series of articles, we will dive deeper into each of these key areas of cybersecurity compliance, providing you with practical guides and actionable insights to help you on your compliance journey. Stay tuned!

In the meantime, don’t hesitate to reach out to us if you have any questions or need further advice. We’re here to help you navigate the complex world of cybersecurity and ensure your startup is secure, compliant, and ready for success. Stay safe, stay secure, and keep innovating!

Is steering through the vast cybersecurity universe leaving you a tad bit overwhelmed? Don’t brave it alone. At Belio, we specialize in transforming complexity into comprehension and security threats into solutions. Your startup deserves top-notch cybersecurity with no lingo barriers.

Welcome to a haven where we deliver cutting-edge security solutions in a language you understand. We are on a mission to make cybersecurity feel less like a chore and more like a strategic superpower for your startup.

Join hands with us, and let’s build your secure digital fortress together, fuelled by innovation and forward-thinking. Our state-of-the-art Security-as-a-Service and compliance solutions offer an empowering blend of proactive protection and high-tech advancement, specially tailored to your unique needs.

Ready to unlock your startup’s cybersecurity potential? Get in touch with us TODAY – let’s step into your secure digital future, together with Belio!




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