Financial industry regulations are rapidly advancing, with a heavy focus on digital resilience. DORA is the European Union’s solution to the growing complexity presented by cybersecurity threats, business disruptions, and data protection needs. DORA is rigorous — it requires banks to build systems with operational resilience in mind, going beyond standard data management approaches to guarantee regular monitoring, robust incident reporting, and strong controls around data quality, security, and accessibility.

DORA compliance is especially challenging for mid-market banks. In contrast to larger peers, many lack the resources and dedicated compliance teams to fully respond to DORA’s requests. That leaves them especially vulnerable to DORA, which requires banks of all sizes to demonstrate digital resilience that’s durable, ongoing, and adaptive.

While this is a looming regulatory burden, it presents a real opportunity for smaller and mid-sized banks. While meeting DORA will likely force action, with the right data management platform, banks can efficiently address these needs and position themselves as competitive and compliant. This is where closed source platforms enter the picture.

Here, we’ll explore the various reasons closed source platforms are critical to DORA compliance and how to provide a foundation of a strong, forward-looking operational platform for mid-tier banks.

Why Closed Source Platforms are Best Built for DORA

Closed source platforms offer several advantages and capabilities when developing a DORA-compliant architecture.

1. Security: Private Security Against New Attacks

   Closed source platforms don’t allow code to be hacked like open-source products. They’re outfitted with proprietary security and kept up to date for emerging threats – matching DORA’s stringent cybersecurity standards.

   For instance, a closed source solution usually has encryption, access controls, and full data masking built in. These protections are carefully monitored by the platform’s in-house engineers, meaning middle-market banks can provide maximum security without extensive customization. And closed source solutions with AI-powered cybersecurity provide a high level of protection that can detect and respond to the threat in real-time.

   To DORA’s benefit, this security-first thinking positions a bank to be protected and ready – with robust defense mechanisms that are tailored to the financial sector.

2. Stability and Consistency: The App That Just Works

   Reliability is a requirement in the financial sector, and closed source platforms are often designed for consistency. While some open-source solutions can be susceptible to issues with compatibility or unexpected downtime due to mismatches in code, closed source solutions are maintained by engineers. They undergo stringent quality assurance to ensure that they scale and work well across use cases.

   For a mid-tier bank who wants to stay online forever, a trusted closed source platform is key. Data is always available, true, and compliant, even under extreme operational stress. This reliability underpins DORA’s requirements for continuity and ensures banks can continue to function without a concern of unanticipated outages or inconsistencies in data that could pose a compliance risk, while benefiting from efficiencies in areas such as data retention, archive, and disposal.

3. Compliance-Ready Features and Proactive Support

   Perhaps the most important feature of a closed source platform is its compliance model. DORA requires continuous monitoring, compliance, and incident reporting – all of which can bog down small compliance teams. Closed source solutions also often include automated audit trails, real-time alerts, and incident tracking features, all specifically focused on financial compliance.

   DORA’s requirement to report incidents can feel overwhelming for mid-market banks. Closed source solutions typically have built-in incident management processes that allow banks to automate incident detection, response, and reporting. In addition, closed source solutions have their own support teams, who are well-versed with the regulatory environment. This experience helps banks make smarter decisions in terms of compliance, using best practices and current guidance. Thanks to this proactive backing, mid-tier banks can better adapt to evolving regulations while establishing an active compliance culture, continuously scanning for risks before they become severe.

4. Control and Data Integrity: Making Data a Trusted Asset

One of the essential parts of DORA compliance is data integrity. With a closed source system, banks can execute data lifecycle tasks with a unified point of control in a secure environment for tasks such as data validation, governance, quality assurance, and storage. Through their own infrastructure, banks can impose strict access controls, limiting access to the data only to those authorized to see it.

With such control, mid-sized banks can maintain data integrity from entry to retention. It backs DORA’s focus on high quality, transparency, and traceability, helping banks to develop a database that is strong and dependable.

How Mid-Tier Banks Can Move Toward DORA

Mid-tier banks should consider the following strategic moves to take advantage of the potential of a closed source data management platform:

• Adopt a Scalable, Modular Platform

  A closed source platform with modular deployment allows banks to start with core compliance capabilities and efficiently expand capabilities as needed, providing a scalable roadmap toward resilience.

• Embed Conformity in Organization DNA

Utilize a closed platform’s compliance tools to drive a culture of ongoing compliance. With automation, it is possible to create a compliance culture across the bank that supports DORA’s vision for resilient operations.

• Leverage Specialized Services for Regulation Strategy

Closed source solutions are supported by compliance professionals. Mid-tier banks must tap this well, working with platform teams to craft bespoke regulatory strategies that not only comply with DORA, but also predict the future.

• Prioritize Data-Centric Security

As DORA’s focus on data integrity shifts to banks, a data-based security approach is imperative. End-to-end encryption, security access controls, and audit trails ensure better security, customer privacy, and compliance.

• Prepare for Future Regulatory Trends

DORA could soon have an impact on the rules beyond Europe. By choosing a platform with regulatory scalability, mid-market banks can set themselves up for jurisdictional regulatory convergence and become a digital resilience benchmark.

Closing Thoughts

DORA compliance for mid-market banks isn’t a regulatory tick box; it’s a key opportunity to reinvent resilience in a fast-moving digital world. Adopting a closed source data management solution is an innovative move that can meet DORA’s rigorous standards while providing the highest levels of security, reliability, and compliance. This strategy gives banks a firm base that will not only serve to keep up with today’s requirements, but also stay flexible enough to meet tomorrow’s needs, in an environment where regulatory pressure is only mounting.

In a highly trusted industry, selecting a closed source platform means ensuring customer data, digital assets, and a strong operating infrastructure. In the case of mid-market banks, it isn’t a matter of meeting current needs, but of securing a sustainable infrastructure that fosters trust, security, and flexibility that will make for the most successful banks in the coming decade.

Contact our team to learn more about Pentaho for mid-tier banks.