Digital transformation has revolutionised the way financial organisations operate. But with the benefits come new challenges, particularly in terms of digital security and resilience. The Digital Operational Resilience Act (DORA) is a major piece of European Union legislation aimed at strengthening the digital resilience of financial organisations. In this comprehensive article, we take a deep dive into the subject, explaining what DORA is and discussing how Artificial Intelligence (AI) plays a crucial role in checking contracts for DORA compliance. We also highlight the reasons why it is essential to use AI to check contracts for DORA compliance and the benefits this technology can bring to organisations.
The Digital Operational Resilience Act (DORA) is a comprehensive regulatory initiative of the European Union, unveiled in September 2020 as part of the Digital Finance Package. DORA aims to strengthen the digital resilience of financial services firms, ensuring that they can continue to operate despite significant disruptions such as cyber-attacks, technical failures or other operational risks.
The increasing reliance on digital technologies has made the financial sector more vulnerable to threats. Cyber-attacks, system failures and data leaks are just some of the potential risks that can have a significant impact on the stability of financial institutions. DORA aims to address these risks by imposing stringent requirements on the digital resilience and risk management of financial organisations.
Compliance with these requirements is essential for financial organisations to avoid regulatory sanctions and ensure operational stability.
The implementation of DORA poses significant challenges for many organisations, particularly when it comes to ensuring that their contracts comply with the new regulatory requirements. This is especially true for contracts with third parties that provide critical IT services. This is where Artificial Intelligence (AI) can play a critical role.
Artificial intelligence provides an advanced method for efficiently and accurately checking contracts for DORA compliance. Traditional contract review methods, typically performed manually, are often time-consuming and error-prone. AI-based contract review software uses state-of-the-art large language models and natural language processing (NLP) to automatically analyse contracts and identify specific clauses relevant to DORA compliance.
These AI systems are able to scan large volumes of contract documents in a short period of time and highlight potential risks or non-compliance. They can also identify patterns and anomalies that may be difficult for the human eye to detect.
Automating contract analysis with AI involves several steps:
This automated process enables organisations to ensure that their contracts are fully, quickly and accurately checked for DORA compliance.
Checking contracts for DORA compliance is a complex task that requires both expertise and precision. Using AI offers many advantages over manual review.
Manual contract review is not only time consuming, but also prone to error. As a result, important clauses critical to DORA compliance may be overlooked. AI-powered systems offer much greater efficiency and accuracy. They are able to process large volumes of data in the shortest possible time, ensuring a level of accuracy that is difficult to achieve through human review alone.
Another key benefit of AI-based contract review is its adaptability to new regulatory requirements. DORA will evolve over time, and organisations need to ensure that their contracts are always compliant with the latest requirements. AI systems can be continuously updated to reflect changes in regulatory requirements. This allows organisations to ensure that they remain compliant over the long term, without the need for constant manual review.
Using AI to check contracts significantly reduces the risk of non-compliance. Incorrect or incomplete contract clauses can lead to significant financial penalties and loss of customer confidence. Automated review with AI enables organisations to minimise these risks while reducing the costs of manual review. This leads to improved cost efficiency and greater operational resilienc
AI systems are able to analyse contract documents in a fraction of the time it would take for manual reviews. This means organisations can respond more quickly to regulatory requirements and organise their operations more efficiently.
By using AI, organisations can ensure that all relevant contract clauses are accurately checked for DORA compliance. This minimises the risk of errors that can occur in a human review and increases the reliability of the review results.
Continuously updating AI systems ensures that organisations are always aware of the latest regulatory requirements and can incorporate them into their contracts. This enables long-term compliance and reduces the risk of non-compliance.
Companies using AI for contract review are positioning themselves as leaders in the use of innovative technology for compliance.
With AI taking over manual contract review, employees can focus their time and resources on more strategic tasks. This increases productivity and enables companies to optimise their operational processes.
The Digital Operational Resilience Act (DORA) poses complex compliance challenges for financial organisations. AI applications such as Legartis offer a powerful solution to efficiently and accurately check contracts for DORA compliance. By using AI, organisations can not only ensure compliance, but also increase operational efficiency, mitigate risk and gain a strategic advantage. In an increasingly digital and regulated world, integrating AI into contract review is a critical step to remaining successful and resilient in the long term.
Find out how Legartis can assist you in reviewing your contracts for DORA compliance.