How DORA Impacts Third-Party Risk Management and How CLM Tools Help
AI summary
A core challenge of contract management under DORA is monitoring third-party ICT providers. Contracts must now include strict clauses for security, access, and audit. Precisely’s CLM platform solves these challenges by tagging critical vendors, automating contract workflows, and ensuring compliant terms from the start.
As the financial sector becomes increasingly dependent on third-party IT services, regulators are raising the bar. Under DORA, third-party risk management isn’t just best practice, it’s a requirement.
Third-party risk: a growing concern
Today’s financial services rely on a complex web of vendors, from cloud infrastructure to cybersecurity tools. If one vendor suffers a data breach or downtime, your entire operation could be affected. DORA requires firms to identify and manage these risks systematically.
What DORA says about third-party providers
DORA introduced strict rules for contracts with third-party ICT providers. These include:
- Designating “critical” providers
- Performing regular risk assessments
- Including clauses around security, reporting, access, and audit
How Precisely supports DORA-compliant third-party risk management
With Precisely’s CLM platform, financial firms can:
- Centralize all third-party contracts to easily identify which vendors are providing critical services
- Tag and classify providers as “critical” or “non-critical” to prioritize compliance
- Use compliant contract templates that include mandatory DORA clauses from the start
- Automate risk review workflows so legal, risk, and IT teams approve critical agreements before signature
A practical example:
Say your IT department wants to onboard a new cloud provider. With Precisely, that contract can be automatically routed through legal, IT security, and compliance for review. Templates ensure that all required DORA clauses, from incident reporting to audit rights, are included by default.
Conclusion
Under DORA, third-party risk management moves from the margins to the center of compliance. Financial institutions must treat their vendor relationships with the same rigor as their internal operations. The right CLM tool helps make that possible and efficient.
Read more about DORA:
What is DORA and Why Does It Matter for Financial Services?
Proving Compliance: How to Build DORA-Ready Contract Workflows
Incident Readiness and Reporting Under DORA with Contract Insights
Want to see how Precisely can support your DORA journey?
Book a demoFrequently Asked Questions About DORA
Why does DORA focus on third-party risk?
Because financial institutions increasingly rely on external IT service providers, which can be a source of significant operational risk.
What types of vendors fall under DORA’s requirements?
Any third-party ICT provider, especially those deemed “critical” to your operations.
What are common challenges in managing vendor contracts under DORA?
Ensuring visibility, maintaining compliant clauses, and routing contracts through proper risk review workflows.
How does Precisely help with vendor risk compliance?
Precisely enables vendor tagging, automated reviews, and templates with DORA-aligned contract language.
