Financial institutions manage some of the most sensitive data in the economy. At the same time they are pressured to adopt cloud services to improve scalability and reduce operational costs. The challenge is simple. Every move of sensitive data increases exposure to regulatory, contractual, and operational risks. The result is a fragile architecture that often fails when the organization needs it most.
The sector has seen a steady shift to technology driven services. This shift increases the dependency on third party infrastructure and raises the probability of cyber incidents. Weak ICT risk management can interrupt cross border financial operations and create systemic damage. This is the reason why the EU introduced the Digital Operational Resilience Act. DORA creates a uniform framework for ICT risk management in the financial sector and becomes enforceable in January 2025.
DORA provides a practical foundation to build resilient digital operations. Its five core requirements are targeted at real world weaknesses.
1. ICT security as a first class operational concern
Continuous risk assessment, active mitigation, and the ability to detect and respond to new attack vectors.
2. Structured incident reporting
Sharing information across the sector builds collective resilience and helps institutions prevent repeat incidents.
3. Testing operational resilience
Regular testing ensures that core services can continue during failures or disruptions.
4. Third party risk management
Financial institutions rely heavily on external ICT providers. DORA requires full visibility into these dependencies and uniform security standards across them.
5. Information sharing
Threat intelligence and best practices improve the sector’s ability to defend against sophisticated attacks.
The Problem with Centralized Cloud Data Processing
Most cloud transformation projects rely on a right side data processing pattern. Sensitive data is extracted from on premise systems and copied into cloud services to run analytics, machine learning, or AI workloads. This architecture introduces predictable risks.
1. Data movement increases exposure
Each transfer creates another attack surface. Centralized data lakes and warehouses are high value targets.
2. Loss of processing ownership
Once data reaches cloud systems, the processing is executed by the provider. Contractual boundaries are rarely transparent to enterprise architects in regulated environments.
3. Lack of physical data locality guarantees
Multi region cloud platforms cannot provide clear statements about where data is stored at any moment. This conflicts with GDPR, DORA, and internal compliance requirements.
4. Increased operational fragility
SaaS outages at hyperscalers have shown that institutions cannot control recovery times and availability. Incidents at Azure or identity providers like Okta demonstrate the scale of these risks.
5. Technical debt and unnecessary complexity
Years of incremental integration have resulted in multi stage ETL pipelines, duplicated data, and slow incident recovery.
Financial institutions need a viable alternative that removes data movement as a default assumption.
DORA Compliant Data Processing with Scalytics Federated
Scalytics Federated provides an execution model that aligns with DORA compliance requirements and removes the architectural risks associated with centralized cloud processing. The platform was built by the original creators of Apache Wayang and extends the federated execution model into a production ready environment for regulated industries.
Scalytics Federated executes computations directly at the data source. The institution keeps full control over sensitive data. No unnecessary data copies. No blind trust in multi tenant cloud infrastructure. No loss of processing ownership.
This is a direct match for DORA’s operational requirements.
Enhanced data security
Sensitive data stays inside controlled environments. Attackers cannot access centralized storage because it does not exist.
Improved data privacy
Calculations happen at the source system. No additional data copies and no uncontrolled propagation across cloud services.
Reduced third party exposure
Minimal data sharing with external providers reduces contractual risk and simplifies oversight.
Predictable operational resilience
Control over the execution environment allows institutions to design architectures that comply with DORA and internal governance requirements.
Why This Matters
DORA is not only a regulatory requirement. It is a forcing function that exposes the limitations of current cloud centric data architectures. Institutions that continue to rely on centralized processing will face increasing compliance costs and repeated operational failures.
Scalytics Federated provides a realistic path forward. It strengthens resilience, reduces exposure, and gives financial institutions a data processing architecture that aligns with the regulatory landscape that is forming in the EU and beyond.
About Scalytics
Scalytics Federated provides federated data processing across Spark, Flink, PostgreSQL, and cloud-native engines through a single abstraction layer. Our cost-based optimizer selects the right engine for each operation, reducing processing time while eliminating vendor lock-in.
Scalytics Copilot extends this foundation with private AI deployment: running LLMs, RAG pipelines, and ML workloads entirely within your security perimeter. Data stays where it lives. Models train where data resides. No extraction, no exposure, no third-party API dependencies.
For organizations in healthcare, finance, and government, this architecture isn't optional, it's how you deploy AI while remaining compliant with HIPAA, GDPR, and DORA.Explore our open-source foundation: Scalytics Community Edition
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