Orizon believes the new DORA regulation will push Spanish banks to properly size the performance of their technology

Madrid, 17 June 2024. – The Spanish technology company Orizon believes that the new European DORA Regulation (Digital Operational Resilience Act), which aims to secure the operations of the EU financial sector and its ability to keep providing services in adverse situations, is a unique opportunity for the Spanish financial system to properly size the conceptual and real value of "performance" in its technology systems, a cornerstone of adapting to the new rules. DORA will be mandatory from 17 January 2025 for financial institutions and suppliers operating in the EU, whether based in the European Union or in a third country.

In fact, the new regulation, which stresses compliance with a range of requirements to strengthen the security of the European financial system, mentions the "performance" of technology systems as a determining factor in raising institutions' resilience and, in turn, in increasing efficiency and keeping these organisations' technology costs in check. Another new feature of DORA is that it not only sets uniform requirements for organisations' networks and information systems, but also establishes an oversight framework for external technology service providers.

In this respect, according to Orizon, complying with the new regulation on time puts Spanish banks against a "countdown". As the company has stated on many occasions, and not only about banks but also about large companies with complex technology systems, the Spanish financial system systematically suffers cost overruns caused by software problems and inefficiencies, due to poor management of its systems' performance, and this situation has worsened markedly with cloud migrations.

In fact, according to Orizon, these migrations and the high complexity of the cloud have caused "unexpected" cost overruns of around 45% in technology budgets and, paradoxically, results rated as negative, since nearly 80% of organisations have not reached the objectives they set.

Orizon points out that the operational resilience of financial institutions involves, as DORA states, risk management and security, but it also concerns the performance of the technology systems that support their business. That means keeping a series of key performance indicators (KPIs) under control, such as availability, response times and external suppliers' compliance with service level agreements.

All these KPIs are directly affected by software which, according to Orizon, lacks quality in both development and maintenance, a common problem in the financial sector, where between 30% and 40% of IT spending goes to this item. Specifically, in software development and maintenance in the financial sector, Orizon finds that 50% of all technical components currently show some bad practice. Even more alarming, when the software is modified or updated, these bad practices remain and spread, because they are not identified and there are no mechanisms to detect and fix them.

Constant measurement and cost control

Constant measurement is the key to continuous optimisation and the basis of Orizon's BOA platform, which integrates more than 150 KPIs aligned with each organisation's priorities and requirements. These KPIs are based on algorithms developed by the company in line with its continuous performance improvement standard, unique in the world, and its DevPerOps methodology.

BOA technology enables continuous IT performance control and optimisation across all these environments. BOA detects, identifies and correlates inefficiencies and problems, ranks them by importance and business impact, and proposes how to resolve them. In addition, by applying data analytics and artificial intelligence, BOA gives companies an essential capability to analyse risks and act preventively, so they can know their past, present and future technology costs.

Likewise, in line with one of DORA's new features (oversight of the quality of external suppliers' developments), BOA also ensures that suppliers comply with their service level agreements. The company has found that when IT areas and external suppliers know they are being monitored and measured, they are aware of being under continuous assessment, and objectives they used to see as final become permanent goals.

According to Ángel Pineda, CEO of Orizon, "our proposal for continuous performance improvement responds precisely to DORA's core objective: a financial sector that is resilient and able to offer high-quality services in all circumstances, and, what's more, while keeping costs under control". "The financial sector," Pineda adds, "has the opportunity and the need to evolve from a classic IT governance model, essentially functional and reactive, that is, based on incidents, to a model of efficiency, service and performance control based on KPIs that matter to the business."

About Orizon

Orizon provides technology performance solutions that bring value to IBEX 35 companies and large companies leading their sectors, identifying and solving software problems to ensure maximum levels of availability, performance and efficiency. The cost savings and faster applications are significant for the organisations Orizon works with, making it a key ally of senior management. A pioneer in applying artificial intelligence to improve business in IT production environments (AIOps), Orizon makes it possible to monitor, detect and resolve inefficiencies in 100% of technology elements. Its R&D&I and its technology, unique in the market, are recognised by official Spanish institutions and by the European Commission.