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The **New York Department of Financial Services (NYDFS) Cybersecurity Regulation (23 NYCRR 500)** was designed to protect consumer data and financial systems from cyber threats. It applies to financial institutions and insurance companies operating in New York. Here are **12 key items** the regulation covers:
Each covered entity must maintain a **cybersecurity program** designed to protect the confidentiality, integrity, and availability of the entity’s information systems. The program must be based on the entity’s risk assessment and be able to detect, respond to, and recover from cyber incidents.
Organizations must implement a written **cybersecurity policy** approved by senior leadership, covering areas such as data governance, asset management, network security, incident response, third-party vendor management, and more. This policy outlines the company’s approach to managing and mitigating cybersecurity risks.
Entities are required to conduct periodic **risk assessments** to identify cybersecurity risks and evaluate the effectiveness of their cybersecurity program. These assessments must guide the design of the cybersecurity program and address how to mitigate identified risks.
The regulation mandates **access controls and identity management** to restrict access to sensitive information. Entities must implement procedures that limit access privileges to information systems based on job roles, and must monitor and periodically review access controls.
To ensure secure access to sensitive systems, entities must implement **Multi-Factor Authentication (MFA)** where appropriate. MFA is required for accessing privileged accounts and any systems that contain non-public information.
The regulation requires the encryption of **non-public information**, both in transit and at rest, to prevent unauthorized access. If encryption is not feasible, organizations must implement alternative compensating controls to protect sensitive data.
Organizations must create and maintain a formal **incident response plan**. This plan should outline how the company will respond to a cybersecurity event, including roles and responsibilities, communication strategies, and procedures for containing and recovering from the incident.
Employees must undergo regular **cybersecurity awareness training** to ensure they are aware of cybersecurity risks and how to mitigate them. This training helps reduce the risk of phishing attacks and other user-targeted cyber threats.
Entities are required to assess and monitor the cybersecurity practices of their **third-party service providers**. These providers must have adequate security measures in place, and the entity must ensure that the providers comply with the necessary cybersecurity standards to protect sensitive data.
Covered entities must designate a **Chief Information Security Officer (CISO)** responsible for overseeing and implementing the cybersecurity program and policies. The CISO is required to submit annual reports to the entity’s board of directors or equivalent governing body, detailing the effectiveness of the program.
Entities must conduct regular **penetration testing** and **vulnerability assessments** to evaluate the security of their systems. Penetration testing should be performed at least annually, while vulnerability assessments should be conducted periodically to identify weaknesses in the system that could be exploited by cybercriminals.
The regulation requires organizations to **report cybersecurity events** to the NYDFS within 72 hours if the event has a material impact on the organization or involves unauthorized access to sensitive data. Prompt reporting allows the NYDFS to monitor and address widespread cybersecurity threats.
The **NYDFS Cybersecurity Regulation** imposes stringent requirements on financial institutions and insurance companies operating in New York. By addressing these 12 areas, organizations can enhance their cybersecurity posture, protect consumer data, and comply with the regulatory standards set by the NYDFS.
To ensure compliance with the particular requirements connected to PAM and MFA, it is imperative to refer to the most recent version of the NY DFS Cybersecurity Regulation as well as any modifications or recommendations that the NY DFS may release in the future. It is imperative to stay updated about any modifications to regulations and requirements since they may change over time in order to ensure compliance.
Bert Blevins is a distinguished technology entrepreneur and educator who brings together extensive technical expertise with strategic business acumen and dedicated community leadership.
