NYDFS Part 500 Cybersecurity Rule

The New York Department of Financial Services (NYDFS) Part 500 Cybersecurity Rule, enacted in 2017 and updated in 2023, sets cybersecurity requirements for financial institutions and licensed entities operating under NYDFS jurisdiction. It is one of the most comprehensive state-level cybersecurity regulations in the U.S., applying to banks, insurance companies, mortgage lenders, fintech platforms, and virtual currency firms.Part 500 mandates a risk-based cybersecurity program to protect consumer data and ensure operational resilience. Covered entities must implement measures across governance, access control, encryption, incident response, and vendor risk management. The 2023 amendments introduced stricter obligations, including enhanced board oversight, expanded reporting, and independent audits for larger companies. Organizations must establish comprehensive cybersecurity frameworks that include transaction monitoring systems to detect suspicious activities, prevent unauthorized transactions, and maintain compliance with evolving regulatory requirements across all digital financial services platforms.