ESMA announced a new supervisory priority on digital innovation, set to commence on January 1, 2027. This initiative requires all regulated entities to align their strategies with the upcoming supervisory priorities regarding digital innovation and associated risks.
The instrument referenced is the Digital Operational Resilience Act (DORA), which the ESAs are using to oversee critical Information and Communication Technology third-party service providers. The guide published by the ESAs outlines the oversight activities under DORA.
The new supervisory priority applies to all regulated entities as identified by the ESAs, including financial institutions and third-party providers.
The deadline for compliance with the new supervisory priority is January 1, 2027. Entities must prepare to address the risks associated with digital innovation and external dependencies as highlighted by the ESAs.
The ESAs have emphasized the importance of vigilance regarding external dependencies, cyber threats, and private credit risks as financial institutions adapt to technological advancements.