Digitalization of the financial sector has brought significant benefits but has also exposed businesses to rising technology risks, including cyberattacks, system outages, and third-party information and communications technology (ICT) failures.
The Digital Operational Resilience Act (DORA) is a EU regulation that will apply as of 17 January 2025. DORA aims at strengthening the IT security of financial entities such as banks, insurance companies and investment firms to ensure that the financial sector in Europe can stay resilient in the event of a severe operational disruption.
There are many activities that need to be undertaken to comply with the regulation. Monitoring software quality and performing code reviews are two of them.
Here are six reasons why monitoring software quality and performing code reviews are essential in the context of DORA:
1. Enhance Security and Risk Management
Code reviews help identify and mitigate security vulnerabilities early in the development process. This aligns with DORA’s emphasis on ensuring robust security measures to protect against cyber threats and operational disruptions. By detecting potential flaws, organizations can prevent breaches that could compromise financial stability and customer trust.
2. Ensure Compliance with Regulatory Standards
DORA requires financial entities to comply with strict digital resilience standards. Regular code reviews facilitate adhering to these regulations, minimizing the risk of non-compliance penalties. This proactive approach towards code reviews is one of the components to ensure that the code meets legal and regulatory requirements, maintaining the organization’s reputation and operational integrity.
3. Improve Code Quality and Maintainability
Monitoring software quality and code reviews encourage best practices in coding, leading to higher quality and more maintainable software. This is crucial for ensuring that systems can quickly adapt to changes and recover from disruptions, a key aspect of digital operational resilience. Well-structured, clean code is easier to understand, debug, and extend, facilitating faster recoverability after operational issues.
4. Promote Knowledge Sharing and Collaboration
The process of monitoring and reviewing code fosters a culture of collaboration and knowledge sharing among development teams. This collective approach enhances the team’s ability to build resilient systems, as it pools together diverse expertise and perspectives. Collaborative code reviews can also serve as a training ground for less experienced developers, improving overall team competency.
5. Early Detection of Bugs and Issues
Code reviews act as a quality control mechanism, allowing teams to catch bugs and issues before they reach production. This early detection is vital for maintaining the resilience of digital operations, as it reduces the likelihood of software failures that could disrupt business activities. Identifying and addressing issues early ensures smoother deployments and more stable operations.
6. Manage the digital Risk associated with critical ICT third-party software components
Providing a Software Bill of Materials (SBOM) allows for getting an overview of the external libraries and components in use and to analyze whether there are vulnerabilities.
By integrating software monitoring and code reviews into the development process, organizations can significantly enhance their digital operational resilience in line with DORA’s requirements, ensuring secure, compliant, and robust systems.
