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In today’s interconnected business environment, organizations must navigate an increasingly complex regulatory landscape. Key regulatory requirements such as, the Digital Operational Resilience Act (DORA), the Sarbanes-Oxley Act (SOX) and the Payment Card Industry Data Security Standard (PCI DSS) are essential in ensuring financial transparency, operational resilience and data security. But what sets them apart and where do they overlap? Let’s explore.
What Are SOX, DORA, and PCI DSS?
- SOX: Introduced in 2002, the Sarbanes-Oxley Act ensures accurate financial reporting and corporate accountability. It applies primarily to U.S.-based public companies, emphasizing internal controls and financial disclosures.
- DORA: Enacted by the EU, the Digital Operational Resilience Act focuses on digital operational resilience for financial institutions. It establishes robust guidelines for managing ICT (Information and Communication Technology) risks, ensuring businesses can withstand cyber incidents.
- PCI DSS: A global standard created to secure payment card data, the Payment Card Industry Data Security Standard applies to any organization handling cardholder information. It mandates rigorous security measures to prevent data breaches.
Key Differences
| SOX | DORA | PCI DSS | |
| Scope | U.S. public companies. (Section 302, 404) | EU financial entities. (Article 2) | Global organizations handling card data. (Requirement 1) |
| Primary Concern | Financial reporting accuracy. (Section 404) | Operational resilience and cybersecurity. (Article 5, Article 6) | Payment data security. (Requirement 3, 4) |
| Enforcement | SEC and PCAOB. | EU financial regulators. (Article 46) | Payment brands (Visa, Mastercard). |
| Specificity in IT | Limited to financial systems. (Section 404) | Comprehensive ICT and operational risks. (Article 11, Article 15) | Highly prescriptive for payment environments. (Requirement 12) |
Overlapping Areas Across SOX, DORA, and PCI DSS
While SOX, DORA, and PCI DSS have distinct scopes, they share common objectives in risk management, incident response and compliance auditing:
| SOX | DORA | PCI DSS | |
| Risk Management | Focuses on risks to financial reporting systems. | Emphasizes managing ICT and operational risks. (Article 5, DORA Regulation) | Requires mitigating risks to payment data. (Requirement 12) |
| Incident Response | Requires procedures to disclose financial data breaches. (Section 302) | Mandates reporting and responding to ICT disruptions. (Article 15) | Specifies response plans for payment data breaches. (Requirement 12) |
| Third-Party Oversight | Requires oversight of third parties impacting financial reporting. (Section 404) | Regulates third-party ICT providers for financial entities. (Article 28) | Ensures third-party service providers comply with security standards. (Requirement 12) |
| Auditing and Compliance | Requires annual audits of internal controls. (Section 404) | Implements operational resilience assessments and testing. (Article 7) | Demands regular audits and vulnerability scans for payment systems. (PCI DSS v4.0) |
| Data Integrity | Ensures accuracy of financial records. | Focuses on maintaining operational and ICT system integrity. (Article 6) | Protects cardholder data integrity and confidentiality. (PCI DSS v4.0) |
Common Technical Measures to Consider
Although SOX, DORA, and PCI DSS have distinct objectives, they share several technical measures that businesses can implement to align their compliance efforts. These measures not only enhance security but also streamline adherence to multiple frameworks.
| Technical Measure | SOX | DORA | PCI DSS |
| Access Controls | User restrictions and authentication. | Role-based access and secure authentication (Article 6). | Strict access control requirements (Req. 7, 8). |
| Data Encryption | Encryption for sensitive data. | Encryption for ICT-related data (Article 6). | Encryption of cardholder data (Req. 3, 4). |
| Monitoring and Logging | Log unauthorized access or changes. | Logging for ICT incident monitoring (Article 15). | System and data access logging (Req. 10). |
| Testing and Assessments | Regular testing of IT controls. | Penetration and resilience testing (Article 23). | Penetration testing and scans (Req. 11). |
| Backup and Recovery | Backup systems for financial data. | Backup and disaster recovery plans (Article 11). | Backup solutions for cardholder data (Req. 12). |
| Network Security | Secure networks for data protection. | Network defenses (firewalls, IDS) (Article 6). | Firewalls, secure configurations (Req. 1, 2). |
| Multi-Factor Authentication | Often recommended. | Mandatory for critical ICT systems (Article 6). | Required for sensitive systems (Req. 8). |
Why This Matters to Your Business
For companies operating in regulated industries or handling sensitive data, understanding these frameworks is critical. Compliance not only protects against fines and reputational damage but also fosters trust among customers and stakeholders.
For example:
- If your company is a public entity in the U.S., SOX compliance ensures the accuracy of your financial statements.
- If you’re a financial institution in the EU, DORA equips you to handle cyber risks and operational challenges.
- Handling payment card transactions, PCI DSS safeguards your customers’ data and strengthens your security posture.
The Cost of Non-Compliance
Failing to comply with SOX, DORA, or PCI DSS doesn’t just result in regulatory scrutiny—it can lead to significant financial penalties, legal liabilities and reputational damage. Here’s a breakdown:
SOX (Sarbanes-Oxley Act)
- Corporate officers who willfully certify false financial statements can face fines up to $5 million and/or imprisonment for up to 20 years (Section 906).
- Tampering with records or obstructing investigations can lead to criminal penalties, including imprisonment for up to 20 years (Section 802).
DORA (Digital Operational Resilience Act)
- Financial entities in violation of DORA can be fined up to 2% of annual global turnover for severe breaches of operational resilience requirements, such as inadequate ICT risk management or failing to report major incidents.
- Specific penalties vary by Member State within the EU but are harmonized to ensure consistency and proportionality.
PCI DSS
Non-compliance penalties are typically imposed by payment brands like Visa and Mastercard. These include:
- Fines ranging from $5,000 to $100,000 per month until compliance is achieved.
- Potential revocation of card processing privileges and higher transaction fees.
How to Align with Multiple Regulatory Requirements
Organizations such as a multinational bank operating in the EU or a retailer processing credit card transactions globally, must comply with multiple regulatory requirements. Here’s how to streamline compliance:
- Integrated Risk Management: Build policies that address financial, ICT and data security risks holistically.
- Unified Incident Response Plans: Standardize response procedures for data breaches, cyber disruptions, and financial irregularities. This unified approach minimizes confusion and ensures timely action during incidents.
- Auditing for All: Conduct comprehensive audits that meet SOX, DORA, and PCI DSS requirements.
Through these measures, organizations can reduce complexity, improve resource utilization, and ensure they remain compliant across all frameworks.
Practical Benefits for Your Business
Adopting a unified approach to compliance doesn’t just meet regulatory obligations—it also delivers practical advantages:
- Cost Savings: Streamlining risk management and auditing across frameworks reduces duplicated efforts and optimizes resource allocation.
- Enhanced Security: Implementing shared technical measures like encryption, logging, and access controls improves protection for all critical systems and data.
- Business Continuity: Resilience testing and incident response plans ensure your organization can recover quickly from disruptions, safeguarding operations and customer trust.
By proactively addressing these frameworks, businesses can turn compliance into a strategic advantage, fostering growth and stability in a competitive marketplace.
In Conclusion
Regulatory requirements like SOX, DORA and PCI DSS provide a robust foundation for financial integrity, operational resilience and data security. By understanding their differences and leveraging their overlaps, businesses can create a compliance strategy that not only meets legal obligations but also drives confidence in their operations.
Need help navigating these regulatory requirements? Contact us for tailored solutions to align your business with today’s compliance standards.
References:
Digital Operational Resilience Act (EU) 2022/2554. EUR-Lex.
Payment Card Industry Data Security Standard. Requirements and Testing Procedures, Version 4.0.1, June 2024.
Sarbanes-Oxley Act. Public Law 107–204, Approved July 30, 2002.