Beyond the Checklist: Mastering DORA and NIS2 Compliance with Microsoft 365 Security

Beyond the Checklist: Mastering DORA & NIS2 Compliance with Microsoft 365 Security

The New Rules of the Game: A Simple Breakdown

Before we dive into the “how-to,” let’s demystify these new regulations. They are all slightly different, but their core principles are remarkably similar.

  1. The EU’s NIS2 Directive: Think “Proactive Cyber Health”

The first NIS Directive was a good start, but it only applied to a small number of critical industries. NIS2 is the big brother with a much wider reach. It extends the list of “essential” and “important” entities across Europe, potentially affecting over 160,000 organisations.

The EU is saying that if you provide a service that’s important to society—like energy, transport, or even digital services—you have a fundamental duty to be cyber-resilient. You can’t just react to a breach; you have to actively work to prevent one. This includes things like having a strong incident response plan, using multi-factor authentication (MFA), and securing your supply chain.

  1. The UK’s Cyber Security & Resilience Bill: Our Own “Tougher Stance”

While the UK isn’t directly adopting NIS2, our government’s new Bill is a very close cousin. It’s a “fusion approach” that takes inspiration from both NIS2 and DORA. The goal is to update the UK’s existing NIS Regulations to address modern cyber threats.

This Bill is set to bring more businesses into scope, most notably Managed Service Providers (MSPs). It will introduce a new concept of a “Designated Critical Supplier,” meaning that if you’re a key supplier to a critical service, you will be held to the same high standards. The Bill also proposes much stricter incident reporting—you may need to report a significant incident within just 24 hours of becoming aware of it, followed by a full report within 72 hours. This is a massive change from the old rules and requires a real-time, continuous approach to security.

  1. The EU’s DORA: Think “Financial Fitness for the Digital Age”

DORA is a new regulation (not just a directive) that has direct legal force across the EU. It is specifically aimed at the financial services sector and its critical technology suppliers.

DORA is the EU’s way of ensuring that financial institutions can handle a full-blown digital meltdown. It requires banks and insurers to have a comprehensive plan for digital operational resilience. This means regular testing of their systems to make sure they can withstand, and quickly recover from, a cyber-disruption. It also makes them directly responsible for the security posture of their third-party tech providers, like the cloud providers they use.

The Elephant in the Room: The Shared Responsibility Model

This is the single most important concept to grasp. You might think, “Well, Microsoft must be compliant, so we are too.” This is a dangerous oversimplification. Microsoft has a “Shared Responsibility Model” that defines who is responsible for what.

Think of it like this:

  • Microsoft’s Responsibility: The security of the cloud. This includes the physical data centres, the networking hardware, and the underlying infrastructure. They are like the landlord of a high-tech apartment building, responsible for the structural integrity, the plumbing, and the electricity.
  • Your Responsibility: The security in the cloud. This includes everything you put into your apartment: your data, your identities, your devices, and your access controls. You are responsible for locking your door, not leaving the key under the mat, and making sure only authorised people have access to your home.

The new regulations place the burden of proof firmly on your shoulders. You have to prove that you are using the tools Microsoft provides to secure your “apartment” in a way that meets the standards of NIS2, DORA, and the UK Bill. If your internal team lacks the specialist knowledge to do this, that’s where a dedicated cyber security partner like Elasticito can provide the expertise to manage your part of the responsibility.

Turning the Dial: From Reactive to Proactive with Microsoft 365

So, how do you do this without hiring a team of in-house experts? The answer lies in leveraging the tools that are already part of your Microsoft 365 subscription, often with guidance from an experienced partner.

  1. Identity and Access Management: Your Front Door

Every cyberattack starts with an identity. Protecting your user accounts is the single most important step you can take.

  • What the regulations demand: All three regulations put a huge emphasis on strong authentication and controlling access to sensitive data and systems.
  • How Microsoft 365 helps:
    • Microsoft Entra ID (formerly Azure Active Directory): This is your central identity hub. The single most impactful action you can take is to enable Multi-Factor Authentication (MFA) for all your users. The regulations demand it, and it’s the simplest way to block a vast majority of attacks.
    • Conditional Access Policies: This is where you get smart. You can set up rules that say, for example, “If a user is trying to access our financial data from a device we don’t know, from outside the UK, they must go through an extra layer of authentication.” This is a simple yet powerful way to manage risk, which is a key requirement of NIS2 and the UK Bill.
    • Privileged Identity Management (PIM): Your IT administrators have the keys to the kingdom. PIM is a tool that allows you to grant them “just-in-time” access to admin roles. Instead of having permanent admin rights, they can request them for a specific period to perform a task. This drastically reduces the risk of a compromised admin account.
  • How Elasticito can assist: Setting up these policies correctly, especially PIM and Conditional Access, can be complex. Elasticito can help you design and implement the right identity governance policies for your specific business needs, ensuring you’re compliant and secure without blocking your users’ productivity.

  1. Data Protection and Governance: The Vault

The regulations are about protecting important information. You need to know where your data is, what it is, and who has access to it.

  • What the regulations demand: Protecting sensitive data is a core component of all three frameworks. DORA, in particular, requires that data is classified based on risk assessments and that security measures are applied accordingly.
  • How Microsoft 365 helps:
    • Microsoft Purview: This is your compliance control centre. It’s a suite of tools that allows you to see and manage your data across your entire Microsoft 365 environment.
    • Data Loss Prevention (DLP): With DLP, you can create policies that automatically prevent sensitive data (like customer details, credit card numbers, or internal reports) from being emailed outside the company or saved to an unapproved location. This directly addresses the need to protect data.
    • Information Protection: You can use sensitivity labels to classify documents. For example, a document marked “Confidential” can be automatically encrypted so that only authorised people can view it, no matter where it’s stored.
  • How Elasticito can assist: Defining what constitutes “sensitive data” and how to label it effectively is a major challenge. Elasticito can provide the strategic and technical expertise to help you build a comprehensive data governance framework in Purview, ensuring your DLP and information protection policies are robust and relevant.

  1. Incident Response and Management: The Fire Alarm

When a cyber incident occurs, time is of the essence. The new regulations demand rapid detection and reporting.

  • What the regulations demand: You must have a robust plan to detect, respond to, and report incidents quickly. The UK Bill’s 24-hour reporting window is a prime example of this.
  • How Microsoft 365 helps:
    • Microsoft Defender Suite: This is your first line of defence. Defender for Office 365 scans emails for phishing and malware, while Defender for Endpoint protects the devices your employees use.
    • Microsoft Sentinel: Think of Sentinel as a central security dashboard for your entire organisation. It collects security data from all your Microsoft 365 services and other sources, and then uses AI to help you spot threats and automate your response. This capability is critical for meeting those tight reporting deadlines.
  • How Elasticito can assist: To get the full value from Microsoft Defender and Sentinel, you need a team that can actively monitor the alerts, perform threat hunting, and manage the incident response process. Elasticito can provide a Managed Detection and Response (MDR) service, acting as an extension of your team to ensure that no threat goes unnoticed and that you can respond to incidents within the required timeframes.

  1. Continuous Compliance and Auditing: Your Report Card

The new regulations aren’t just about passing a test; they are about proving that you are continuously working to improve your security posture.

  • What the regulations demand: DORA, NIS2, and the UK Bill all require organisations to be able to demonstrate their compliance to regulators and auditors at any time.
  • How Microsoft 365 helps:
    • Microsoft Purview Compliance Manager: This is arguably the most powerful tool for this purpose. It’s a dashboard that provides a real-time “compliance score” for your organisation. It has built-in templates for regulations like DORA and NIS2 that break down the requirements into clear, actionable tasks. It even allows you to assign these tasks to team members and upload evidence of your work. This is the ultimate tool for moving from a static audit to a dynamic, ongoing compliance programme.
  • How Elasticito can assist: The Compliance Manager dashboard can be overwhelming. Elasticito offers a service specifically designed to manage your compliance journey. They can help you set up and maintain the dashboard, interpret your compliance score, prioritise the actions you need to take, and ensure you have all the necessary documentation ready for an audit.

It’s a Mindset, Not a Product

The key takeaway is this: Microsoft 365 gives you the toolbox, but you are the builder. You can have the most advanced security features in the world, but if they are not configured correctly or if your people are not trained to use them, they are effectively useless.

Achieving continuous compliance isn’t just a technical challenge; it’s a cultural one. It requires a shift in mindset across your organisation.

  • Make it a shared responsibility: Educate your employees. Regular cyber awareness training is a mandate in NIS2, but it’s also common sense.
  • Don’t wait for a breach: The time to act is now. Start with a gap analysis to understand where you are and what you need to do.
  • Embrace the tools: You are already paying for these powerful features within your Microsoft 365 licence, use them. The financial penalties for non-compliance are severe, but the reputational damage and the loss of business from a cyber-breach are far worse.

The new regulatory landscape is challenging, but it is also an opportunity. By using the tools you already have in Microsoft 365, and with the expert guidance from a partner like Elasticito, you can not only meet these new requirements but also build a more resilient, secure, and trustworthy organisation for the future. Don’t think of it as a burden—think of it as building a better, safer business.