The financial services sector just went through its biggest operational resilience overhaul in decades. DORA took effect on January 17, 2025, creating stringent new requirements for digital resilience that extend far beyond banking. But here's what most UK manufacturers haven't realised yet: DORA's impact on the UK SME supply chain will peak in 2026 as large clients now demand real-time evidence of security posture from their smaller suppliers.
If you're a manufacturer supplying to large financial institutions, insurance companies, or their technology providers, DORA compliance isn't someone else's problem—it's becoming your competitive advantage or your biggest barrier to growth.
Manufacturing SMEs are about to face a compliance cascade they didn't see coming. The same operational resilience standards that banks must now meet are flowing down the supply chain to every manufacturer who wants to keep their largest contracts.
Why DORA Matters to UK Manufacturers
DORA applies to more than 22,000 financial entities and ICT service providers operating within the EU, as well as the ICT infrastructure supporting them from outside the EU. That last bit is crucial: if you manufacture components, provide services, or supply technology to any financial institution with EU operations, you're in scope.
The regulation doesn't just stop at direct financial services. SMEs must demonstrate 24/7 resilience to stay in the supply chain of larger UK and European firms. This means manufacturers who've traditionally focused on quality certifications and health and safety compliance now need to prove their operational resilience meets banking-grade standards.
The timing couldn't be more challenging. Eighty-five percent of small to medium-sized manufacturers are seeking more government funding to help bridge the digital skills divide, emphasising the financial challenges manufacturers face when going digital. Yet those same manufacturers are about to face compliance demands that make their current digital transformation look like child's play.
The Five Pillars Hitting Manufacturing Supply Chains
DORA isn't just about cybersecurity—it's a comprehensive operational resilience framework with five core requirements that are cascading into manufacturing:
1. ICT Risk Management
DORA prompts organizations to ensure a robust framework to identify, assess, and neutralize potential IT threats. Regularly scan your digital landscape to identify vulnerabilities, map potential attack vectors, and design mitigation strategies.
For manufacturers, this means your ERP systems, production planning software, and even connected machinery need risk assessments. If your production line can be disrupted by a cyber attack, your financial services clients need to see how you're protecting against that risk.
2. Incident Reporting and Management
DORA mandates a rapid-response system for reporting major ICT incidents to the relevant authorities. But it's not just about reporting to regulators—your supply chain partners will expect immediate notification of any incident that could affect their operations.
The key word is "rapid." Traditional manufacturing approaches to incident management—where problems get escalated slowly through management layers—won't meet DORA-driven expectations from your clients.
3. Digital Operational Resilience Testing
DORA requires regular operational resilience testing, simulating cyber-attacks and disruptions to expose vulnerabilities. UK firms must conduct recurring penetration tests, vulnerability assessments and resilience scenario simulations. Threat-led penetration testing is mandated at least every three years.
Your financial services clients will expect their suppliers to undergo similar testing. This isn't just IT security—it's testing whether your entire operation can continue if your primary systems fail.
4. Third-Party Risk Management
DORA emphasizes rigorous third-party risk management, demanding careful vetting and ongoing monitoring of external providers. UK companies using third parties like cloud computing or external technology consultancies must govern these through stringent service contracts, in-depth risk evaluations and constant monitoring.
For manufacturers, this creates a domino effect: you need to ensure your own suppliers meet these standards, while simultaneously proving to your clients that you meet theirs.
5. Information Sharing
The regulation mandates sharing threat intelligence and incident information across the financial ecosystem. Manufacturing suppliers are increasingly being asked to participate in these information-sharing arrangements.
The Manufacturing Reality Check
Many manufacturers still rely on outdated systems incompatible with modern digital solutions. Transitioning to digital systems requires significant upfront investment in software, equipment, and infrastructure—which can be an obstacle for many SMEs with limited resources.
This creates a perfect storm. Just as UK manufacturers are struggling with basic digital transformation, their largest clients are demanding enterprise-grade operational resilience capabilities.
Manufacturing faces a particular vulnerability given that most companies in this sector are currently undergoing digitalisation. In the majority of instances, this means some legacy operational technology may still be being used, which is likely critical to operations but not as secure as newer systems.
The good news? Growth will still be possible for well-positioned businesses willing to invest in digital technology. The manufacturers who embrace operational resilience as a competitive advantage will find themselves with a significant moat against competitors who ignore these trends.
Assess Your Current State
Understand Client Requirements
Build Basic Capabilities
Test and Validate
The Competitive Opportunity
UK SMEs are entering a decisive phase in their technology evolution. Businesses will be judged on data maturity, operational resilience, financial governance, and compliance readiness.
The manufacturers who get ahead of this trend won't just avoid losing contracts—they'll win new ones. Financial services firms are actively looking for suppliers who can demonstrate robust operational resilience. Being able to prove your systems meet DORA-equivalent standards becomes a significant competitive differentiator.
This isn't just about compliance—it's about operational excellence. The same capabilities that help you meet DORA-driven requirements will reduce downtime, improve efficiency, and make your business more resilient to all kinds of disruptions.
Government Support and Funding
The good news is that help is available. The Reach grant scheme can provide matched funding up to 50% to eligible SMEs for digital transformation projects. The Made Smarter programme specifically helps manufacturers with digital resilience initiatives.
Following a Government commitment to a national rollout by 2027, every SME manufacturer in the UK will have regional access to a Made Smarter Adoption Programme. This will accelerate digital transformation across the country, helping businesses compete in a rapidly evolving industrial landscape.
Building Your Action Plan
The key is starting now, before your clients make operational resilience a formal requirement. Here's where to focus:
Immediate Actions (Next 30 Days):
- Audit which of your clients fall under DORA requirements
- Map your most critical digital systems and potential failure points
- Review your current incident response procedures
Short-term Goals (Next 90 Days):
- Implement basic monitoring for critical systems
- Establish clear communication procedures for operational incidents
- Begin documenting your operational resilience capabilities
Medium-term Investment (Next 12 Months):
- Invest in system redundancy for critical operations
- Implement formal resilience testing procedures
- Upgrade legacy systems that pose operational risks
The manufacturers who treat operational resilience as a strategic investment rather than a compliance burden will be the ones still winning contracts in 2027. Those who wait for clients to make it mandatory risk finding themselves locked out of their most valuable relationships.
For manufacturers looking to build robust operational resilience capabilities, our automation solutions can help implement the monitoring and incident response systems that DORA-compliant clients increasingly expect. Our pricing guide includes options for operational resilience assessments and implementation support.
The operational resilience revolution has begun. The question isn't whether it will reach your supply chain—it's whether you'll be ready when it does.