With the November 1st, 2024 compliance deadline here, the New York Department of Financial Services (NY DFS) is setting firm requirements for every organization under its oversight. Whether your business is large or small, these cybersecurity measures are no longer optional—and there are no full exemptions.
This is a non-negotiable mandate for protecting sensitive information, reducing risk, and safeguarding your clients’ data. Here’s what your company needs to know to meet the deadline and avoid serious penalties.
Key Requirements from NY DFS That Every Organization Must Meet
Reporting Cybersecurity Plans and Incidents
- Your Chief Information Security Officer (CISO) or designated cybersecurity expert must submit written reports that outline how your organization will address any cybersecurity weaknesses and plans for improvement. Major incidents or significant cybersecurity changes need to be reported to senior leadership and NY DFS quickly. Ignoring these requirements could lead to major regulatory issues.
Why This Matters:
Prompt reporting keeps both your leadership and NY DFS aware of how secure your operations are. This transparency is essential for staying compliant and minimizing the risk of facing costly penalties if a cyber incident does occur.
- Updated Security Policies & Encryption Standards
Every company must ensure that their information security policies meet current encryption standards. This applies to all systems, whether your data is stored in the cloud or on local devices. Without these standards, your organization is open to potential breaches, which could have severe legal and financial repercussions.
Why This Matters:
Encryption protects your clients’ sensitive information by encoding data, making it far harder for unauthorized users to access it. In today’s landscape, encrypted data is essential, and NY DFS now requires it as part of your security baseline.
- Incident Response and Business Continuity Plans
Your incident response and business continuity plans need to be kept updated, tested, and ready to go. This means running through simulations and ensuring everyone knows the protocols if an incident were to occur.
Why This Matters:
Having these plans in place is like having an emergency action plan—it ensures you can respond quickly and effectively, minimizing downtime and protecting both your clients and your reputation.
- Multi-Factor Authentication (MFA)
MFA is now required for all systems, whether accessed locally or remotely. This includes third-party applications and privileged accounts. Essentially, any point of entry to your systems needs this added layer of security.
Why This Matters:
Passwords alone are often insufficient for protecting sensitive information. MFA adds a layer of defense, making it far harder for unauthorized users to access your systems. With cyber threats becoming more sophisticated, this is one of the most effective ways to secure your data.
- Comprehensive Cybersecurity Training for Employees
NY DFS now mandates annual cybersecurity training for all employees. This isn’t just basic training—it covers social engineering tactics, phishing threats, and even advanced threats like deepfakes that use AI to mimic real people.
Why This Matters:
Your employees are your first line of defense against cyber threats. With up-to-date training, they’re more equipped to recognize and avoid potential dangers, keeping your systems and client data safer.
The Compliance Deadline: What Happens if You Don’t Meet It?
Every organization covered by NY DFS must fully comply with these requirements by November 1st, 2024. Falling short could lead to fines, penalties, or even more severe regulatory actions. For smaller companies, this could mean real financial and operational challenges that are difficult to overcome. This may also affect license renewals, putting difficult pauses on operations.
Frequently Asked Questions
Q: What if my organization can’t meet all these requirements by November 1st?
There are no exemptions to these requirements, regardless of your company’s size. If you’re behind, take action immediately. Partnering with a knowledgeable cybersecurity provider can help bring you up to speed quickly.
Q: Do all systems need to have Multi-Factor Authentication (MFA)?
Yes. NY DFS has made it clear that MFA is required for every access point in your network, including both local and remote access, third-party applications, and privileged accounts, utilizing an App or Token based system, and not text based.
Q: What should be included in cybersecurity training?
Annual training must cover not just basic security tips but also more advanced topics like phishing, business email compromise, and threats from AI-driven deepfakes. The goal is to prepare every team member to recognize these risks and respond accordingly.
Q: What data should be encrypted?
All Personally Identifiable Information (PII) must be encrypted and protected. This includes data stored on computers, devices, hard drives, within cloud services, and within emails—both for internal and external communications. Encryption is essential to secure sensitive information and prevent unauthorized access.
Essential Steps to Take Before November 1st
If you haven’t yet addressed these new requirements, there’s no time to lose. Here’s a final checklist:
- Review Your Information Security Policies: Ensure encryption is in place across all systems, both cloud-based and local.
- Implement Multi-Factor Authentication (MFA): Make sure MFA is enabled for all critical access points.
- Schedule Cybersecurity Training: Train all employees on how to recognize and avoid cyber threats.
- Prepare and Submit Required Reports: Your CISO or cybersecurity expert should provide a report to senior leadership and DFS, detailing your cybersecurity posture and any remediation plans.
- Test Incident Response Plans: Run simulations to make sure you’re prepared to respond effectively in the event of a breach.
The Bottom Line
The NY DFS compliance deadline is non-negotiable and affects every organization under DFS oversight, from the smallest agencies to the largest firms. This mandate ensures your clients’ data remains secure and helps protect your business from escalating cyber threats. Taking these steps will not only help you meet the DFS requirements but will also build a more resilient cybersecurity foundation for the future.
Act now to secure your operations, safeguard your clients, and ensure compliance with NY DFS standards.
Give our expert team a call at 646-374-1820 or CLICK HERE to schedule a No-Obligation DFS Compliance Assessment.
In as quickly as 10 minutes, our team can review your compliance standing and give you the information you need to come into compliance.
Walter Contreras
Walter Contreras has over 25 years of experience in information technology, including cybersecurity, with a focus on the Insurance Industry. As both a computer scientist and a graduate of the Columbia University Business School’s Executive MBA program, Walter understands how the world’s digital transformation is impacting small and medium businesses. His mission is to deploy information technology to protect and empower entrepreneurs.
