New York Department of Financial Services

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Keypoint: The New York Department of Financial Services (NYDFS) circulated an industry letter offering guidance to NYDFS “Covered Entities” for assessing and managing AI-related cybersecurity risks, including threats malicious actors using AI and the risks associated with a Covered Entity’s own AI systems.

The NYDFS industry letter (“Letter”) recognizes that Covered Entities can leverage AI to enhance their cybersecurity posture. The department contends that doing so would bolster entities’ compliance with NYDFS cybersecurity regulation 23 NYCRR Part 500 (“Part 500”).

New York proposed first-of-its-kind cybersecurity regulations on Sept. 13, 2016. The proposed rules would apply only to banks, insurers, and other financial services companies regulated by the New York Department of Financial Services (“DFS”). However, the sweeping nature of the regulations and New York’s role as a banking center are likely to make the rules a model for other states.