Cybersecurity Policy Template

DORA Compliant Outsourcing Policy for ICT Activities

1. Introduction

Purpose and Scope: This Outsourcing Policy governs the outsourcing of all Information and Communication Technology (ICT) activities within [Organization Name]. Its purpose is to ensure that outsourced ICT services are managed effectively, securely, and in accordance with DORA regulations, minimizing operational risks and maintaining operational resilience. This policy applies to all departments and individuals involved in outsourcing ICT services, including but not limited to procurement, IT, security, and risk management.

Relevance to DORA: The Digital Operational Resilience Act (DORA) mandates that financial institutions implement robust ICT risk management frameworks. This policy directly supports DORA compliance by establishing a structured approach to managing outsourced ICT risks, particularly focusing on ICT service continuity, incident reporting, and recovery. It specifically addresses DORA's requirements related to ICT risk management, incident reporting, and recovery and ensures compliance with the obligations related to third-party risk management.

2. Key Components

This Outsourcing Policy includes the following key components:

  • Due Diligence and Selection: Process for selecting and vetting third-party providers.

  • Contractual Agreements: Requirements for robust service level agreements (SLAs) and contractual clauses.

  • Risk Assessment and Management: Ongoing assessment and mitigation of ICT risks associated with outsourcing.

  • Monitoring and Oversight: Procedures for monitoring the performance and security of outsourced services.

  • Incident Management: Process for handling incidents affecting outsourced ICT services.

  • Exit Strategy: Plan for managing the termination or transition of outsourced services.

  • Data Protection and Privacy: Compliance with data protection regulations (e.g., GDPR) within outsourced activities.

3. Detailed Content

a) Due Diligence and Selection:

  • In-depth Explanation: This section outlines the process for identifying, evaluating, and selecting suitable third-party ICT providers. This includes a thorough assessment of their financial stability, technical capabilities, security posture, and compliance with relevant regulations (including DORA).

  • Best Practices: Utilize a standardized vendor assessment questionnaire, conduct on-site audits, review references, and perform background checks. Implement a scoring system to objectively compare potential vendors.

  • Detailed Example: Before outsourcing cloud infrastructure, [Organization Name] will use a pre-defined questionnaire to assess the vendor's certifications (ISO 27001, SOC 2), disaster recovery plans, incident response capabilities, and data residency policies. A weighted scoring system will rank vendors, and shortlisted candidates will undergo a site visit and reference checks.

  • Common Pitfalls: Failing to conduct thorough due diligence, relying solely on self-reported information, neglecting to assess the vendor's security posture, and overlooking contractual obligations.

b) Contractual Agreements:

  • In-depth Explanation: This section details the requirements for contracts with third-party providers. Contracts must clearly define service level agreements (SLAs), responsibilities, liabilities, security requirements, data protection provisions, and exit strategies.

  • Best Practices: Include key performance indicators (KPIs) within SLAs, define penalties for non-compliance, and specify clear escalation paths for issues. Incorporate clauses related to DORA compliance, including incident reporting obligations and data breach notification procedures.

  • Detailed Example: The contract with our cloud provider will specify a 99.9% uptime SLA, with penalties for breaches. It will also outline their responsibilities for data security, incident reporting to us within 2 hours, and their contribution to our Business Continuity Plan (BCP).

  • Common Pitfalls: Vague or incomplete contracts, insufficiently defined SLAs, lack of penalties for non-compliance, and neglecting to address DORA-specific requirements.

c) Risk Assessment and Management:

  • In-depth Explanation: This section outlines the process for identifying, assessing, and mitigating ICT risks associated with outsourcing. This includes regular risk assessments, vulnerability scans, and penetration testing of outsourced systems.

  • Best Practices: Utilize a risk matrix to prioritize risks based on likelihood and impact. Develop mitigation strategies and assign ownership for their implementation. Regularly review and update the risk assessments.

  • Detailed Example: A risk assessment for our outsourced payment processing system will identify risks such as data breaches, system outages, and compliance failures. Mitigation strategies will include regular security audits, penetration testing, and implementation of multi-factor authentication.

  • Common Pitfalls: Failing to conduct regular risk assessments, neglecting to address identified vulnerabilities, and inadequate mitigation strategies.

d) Monitoring and Oversight:

  • In-depth Explanation: This section defines the procedures for monitoring the performance and security of outsourced ICT services. This includes regular performance reports, security audits, and vulnerability scans.

  • Best Practices: Implement key performance indicators (KPIs) to track service performance. Establish regular communication channels with third-party providers. Conduct periodic audits to ensure compliance with contractual obligations and security standards.

  • Detailed Example: [Organization Name] will receive monthly performance reports from its managed service provider, including uptime statistics, incident reports, and security alerts. Annual audits will verify compliance with the contract and security standards.

  • Common Pitfalls: Insufficient monitoring, lack of communication with providers, and failure to detect and address performance issues or security vulnerabilities.

e) Incident Management:

  • In-depth Explanation: This section describes the process for handling incidents affecting outsourced ICT services. This includes clear incident reporting procedures, escalation protocols, and communication plans.

  • Best Practices: Define roles and responsibilities for incident management. Establish a clear communication plan to keep stakeholders informed. Conduct post-incident reviews to identify lessons learned and improve processes.

  • Detailed Example: The contract with the third-party provider will specify their incident reporting procedures, including timelines and escalation paths. [Organization Name] will maintain an incident log and conduct post-incident reviews to improve future responses. DORA-mandated reporting will be incorporated seamlessly.

  • Common Pitfalls: Lack of clear procedures, inadequate communication, failure to conduct post-incident reviews.

f) Exit Strategy:

  • In-depth Explanation: This section outlines the process for managing the termination or transition of outsourced services. This includes data migration, system decommissioning, and knowledge transfer.

  • Best Practices: Develop a detailed exit plan that addresses all aspects of the service transition. Ensure that data is securely migrated and that knowledge is transferred to internal staff or a new provider.

  • Detailed Example: The contract will include a clause outlining the procedures for terminating the agreement, including a minimum notice period, data migration timelines, and responsibilities for decommissioning systems.

  • Common Pitfalls: Lack of a comprehensive exit plan, inadequate data migration, and loss of critical knowledge.

g) Data Protection and Privacy:

  • In-depth Explanation: This section details how data protection and privacy requirements are addressed in outsourced ICT activities. This covers adherence to regulations like GDPR and any relevant local laws.

  • Best Practices: Ensure that contracts include explicit clauses covering data protection and privacy, data processing agreements, and adherence to relevant regulations. Regularly monitor the provider's compliance.

  • Detailed Example: The contract with our data center provider will include a data processing agreement specifying their responsibilities for data security and privacy, their adherence to GDPR, and their obligations in case of a data breach.

  • Common Pitfalls: Neglecting data protection requirements in contracts, failure to monitor compliance, and inadequate data breach response procedures.

4. Implementation Guidelines

  • Step-by-step process:

1. Establish a dedicated outsourcing management team.

2. Develop a standardized vendor assessment questionnaire.

3. Define clear criteria for selecting third-party providers.

4. Develop standard contract templates.

5. Implement a risk assessment and management framework.

6. Establish monitoring and oversight procedures.

7. Develop incident management and reporting procedures.

8. Create a comprehensive exit strategy.

9. Train employees on the new policy.

  • Roles and responsibilities: Clearly define roles and responsibilities for each stage of the outsourcing process, including procurement, IT, security, risk management, and legal.

5. Monitoring and Review

  • Monitoring Effectiveness: Regularly review key performance indicators (KPIs) related to outsourced services, conduct periodic audits, and assess the effectiveness of risk mitigation strategies. Track incident reports and their resolution times.

  • Frequency and Process: This policy will be reviewed and updated annually or more frequently as needed, considering any changes in regulations (like DORA updates), technological advancements, or identified weaknesses. The review will involve the outsourcing management team and relevant stakeholders.

6. Related Documents

  • ICT Security Policy

  • Business Continuity Plan (BCP)

  • Incident Management Policy

  • Data Protection Policy

  • Risk Management Framework

7. Compliance Considerations

  • Specific DORA clauses addressed: This policy addresses DORA's requirements regarding ICT risk management, third-party risk management, incident reporting, and operational resilience. Specifically, it ensures compliance with the requirements for outsourcing of critical ICT functions and the ongoing monitoring of these functions.

  • Legal and regulatory requirements: This policy considers GDPR, national data protection laws, and any other relevant legal and regulatory requirements pertaining to data privacy, security, and outsourcing.

This Outsourcing Policy is a living document and will be updated regularly to reflect changes in the regulatory landscape and best practices. Adherence to this policy is mandatory for all employees and third-party providers involved in outsourcing ICT activities within [Organization Name].

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