DORA for Fintechs and Startups: What You Need to Know

The good news is that DORA incorporates proportionality principles that allow smaller entities to implement measures appropriate to their size and risk profile. This guide helps fintechs navigate DORA requirements efficiently.

Key Takeaways

Point	Summary
No size exemption	DORA applies based on sector, not company size
Proportionality applies	Implementation can be scaled to your size and risk profile
Simplified framework available	Certain smaller entities qualify for lighter requirements
Third-party focus critical	Cloud-native fintechs must carefully manage provider relationships
Competitive advantage	DORA compliance can differentiate you from non-compliant competitors

Quick Answer: Fintechs and startups in regulated financial sectors must comply with DORA, but the regulation's proportionality principle allows smaller entities to implement simpler, risk-appropriate measures. Key areas requiring attention include ICT risk management (scaled to your complexity), incident reporting (mandatory timelines apply regardless of size), and third-party risk management (critical for cloud-native companies). Microenterprises benefit from additional flexibility, and certain smaller entities may use a simplified ICT risk management framework.

Does DORA Apply to Your Fintech?

Covered Entity Types

DORA applies if your fintech falls into one of these categories:

Category	Fintech Examples
Payment institutions	Payment processors, money transfer services
Electronic money institutions	E-money issuers, digital wallets
Account information service providers	Open banking aggregators
Investment firms	Robo-advisors, trading platforms
Crypto-asset service providers	Crypto exchanges, custodians, wallet providers
Crowdfunding service providers	Equity and lending platforms
Credit institutions	Neobanks, digital banks

Authorization Status Matters

DORA applies to authorized financial entities. If you:

• Are authorized: DORA applies from the date of authorization
• Are seeking authorization: Build DORA compliance into your setup
• Operate without authorization: Consider regulatory status carefully

Proportionality for Fintechs

The Proportionality Principle

DORA Article 4 explicitly states requirements must be implemented:

"...in accordance with the principle of proportionality, taking into account their size and overall risk profile, and the nature, scale and complexity of their services, activities and operations."

What Proportionality Means in Practice

Factor	Impact
Company size	Smaller teams may combine roles, use simpler governance
Service complexity	Simple business models justify streamlined approaches
Risk profile	Lower-risk activities warrant lighter controls
Customer base	Smaller customer numbers affect incident classification

Microenterprise Status

If your fintech qualifies as a microenterprise (fewer than 10 employees and annual turnover or balance sheet below 2 million), you benefit from additional flexibility:

• Simplified ICT risk management requirements
• May not need dedicated ICT security officer (responsibilities can be combined)
• Proportionate testing requirements
• But still subject to incident reporting obligations

Key DORA Requirements for Fintechs

ICT Risk Management

Even with proportionality, you must address core ICT risk management elements:

Element	Startup-Appropriate Approach
Governance	Founder/CEO takes management body responsibility; document this clearly
Policies	Concise, practical policies covering essential controls
Asset inventory	List of systems, cloud services, and data stores
Risk assessment	Simple, focused assessment of key risks
Protection	Standard security controls (MFA, encryption, access control)
Detection	Basic monitoring, cloud provider alerts, log aggregation
Response	Documented incident response steps and contacts
Recovery	Backup procedures, disaster recovery basics

Incident Reporting

Incident reporting timelines apply regardless of size:

Stage	Deadline
Initial notification	4 hours after classification / 24 hours after detection
Intermediate report	72 hours
Final report	1 month

Startup implications:

• Establish relationship with your competent authority
• Create simple reporting templates
• Know who makes classification decisions (likely founder/CTO)
• Test your ability to report outside business hours

Third-Party Risk Management

Cloud-native fintechs are heavily dependent on third-party services, making this area critical.

Requirement	Startup Approach
Register of Information	Catalog all ICT service providers (cloud, SaaS, APIs)
Contract review	Review terms against DORA requirements; negotiate where possible
Due diligence	Assess security posture of critical providers
Exit planning	Document how you would migrate if needed

Practical considerations:

• Major cloud providers (AWS, GCP, Azure) often resist custom contract terms
• Document your risk assessment where standard terms fall short
• Prioritize contracts for services supporting critical functions
• Consider DORA-aligned startups when selecting new providers

Resilience Testing

Testing requirements scale with size and importance:

Entity Type	Testing Expectations
Microenterprise	Basic vulnerability scanning, incident response tests
Small fintech	Annual vulnerability assessments, backup recovery tests
Growing fintech	Comprehensive testing program, penetration testing
Systemically important	TLPT requirements (unlikely for early-stage fintechs)

Starting point for most fintechs:

• Regular vulnerability scanning (automated tools)
• Annual penetration testing (external provider)
• Backup and recovery testing
• Incident response tabletop exercises

Building Compliance Efficiently

Phase 1: Foundation (Weeks 1-4)

Activity	Output
Confirm DORA applicability	Clear understanding of obligations
Assign responsibilities	Named owner for DORA compliance
Document governance	Board/leadership accountability documented
Create asset inventory	List of all ICT systems and providers

Phase 2: Core Requirements (Weeks 5-12)

Activity	Output
Draft key policies	Information security policy, incident response, business continuity
Perform risk assessment	Documented risks and treatment plans
Review provider contracts	Gap analysis against DORA Article 30
Establish incident reporting	Process and templates ready

Phase 3: Operational Readiness (Weeks 13-20)

Activity	Output
Implement controls	Security controls operational
Conduct initial testing	Vulnerability assessment completed
Prepare Register of Information	Ready for submission
Train team	Staff aware of responsibilities

Common Challenges and Solutions

Limited Resources

Challenge: Small teams with competing priorities

Solutions:

• Focus on highest-risk areas first
• Use templates and automation
• Consider managed compliance services
• Combine roles appropriately (with proper accountability)

Cloud Provider Contracts

Challenge: Standard terms do not meet DORA requirements

Solutions:

• Document risk assessment and acceptance
• Use compensating controls
• Engage provider account teams about DORA addenda
• Consider European or DORA-focused alternatives

Demonstrating Compliance

Challenge: Limited documentation and evidence

Solutions:

• Build compliance into daily operations
• Use compliance platforms for evidence collection
• Document decisions and approvals
• Maintain audit trails in existing systems

Scaling Compliance

Challenge: Keeping up with growth

Solutions:

• Build scalable processes from the start
• Automate where possible
• Plan for increased complexity
• Review compliance regularly as you grow

Competitive Advantages

DORA compliance can differentiate your fintech:

Advantage	Benefit
Enterprise readiness	Large customers expect compliance
Partnership opportunities	Banks prefer compliant partners
Investor confidence	Demonstrates operational maturity
Regulatory relationships	Proactive compliance builds trust
Security posture	Actual resilience improvements

Common Questions

We are pre-revenue. Does DORA apply?

DORA applies to authorized financial entities. If you are authorized (or will be before launch), DORA applies. Build compliance into your setup from the start rather than retrofitting later.

Can we outsource everything?

You can use external services and expertise, but accountability remains with you. The management body must own the framework even if implementation is supported externally.

How do we afford penetration testing?

Many cost-effective options exist: shared assessments, startup-focused security firms, automated testing tools. Prioritize based on risk rather than testing everything.

What about our cloud providers?

Major cloud providers have strong security, but DORA requires you to manage the relationship appropriately. Document provider security, ensure contractual provisions where possible, and assess concentration risk.

Do investors care about DORA?

Increasingly, yes. Sophisticated investors recognize that regulatory compliance is essential for scaling. DORA compliance demonstrates operational maturity and reduces regulatory risk. For detailed budget planning, see our guide to DORA compliance costs.

What about crypto and digital asset providers?

Crypto-asset service providers authorized under MiCA and issuers of asset-referenced tokens are explicitly included in DORA's scope. This includes crypto exchanges, custodians, and wallet providers operating in the EU. The relationship between DORA and MiCA means crypto firms must address both sets of requirements, with DORA focusing on operational resilience and MiCA on market conduct and prudential matters.

How Bastion Helps Fintechs

Bastion specializes in helping fintechs navigate compliance efficiently:

• Proportionate approach: We understand startup constraints and scale recommendations appropriately
• Efficient implementation: Templates and processes designed for smaller teams
• Managed compliance: Ongoing support without building large internal teams
• Growth support: Compliance that scales as you grow
• Audit preparation: Ready for regulatory review and customer due diligence

Ready to tackle DORA compliance? Talk to our team

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Sources

• DORA Article 4 - Proportionality principle
• DORA Article 16 - Simplified ICT risk management framework
• ESA Technical Standards - Implementation requirements for all entity sizes