On October 16, 2024, the New York Department of Financial Services (DFS) issued an Industry Letter to regulated entities entitled “Cybersecurity Risks Arising from Artificial Intelligence and Strategies to Combat Related Risks.”

The letter “is intended to be a tool to assist Covered Entities in understanding and assessing cybersecurity risks associated with the use of AI and the controls that may be used to mitigate those risks.” It does not impose additional compliance requirements beyond the DFS’ Cybersecurity Regulation but is designed to provide guidance on how the Regulation’s framework can be used to assess and mitigate risks arising from artificial intelligence (AI).

The guidance outlines risks such as AI-enabled social engineering, AI-enhanced cybersecurity attacks, exposure or theft of vast amounts of nonpublic information, and increased vulnerabilities due to third-party, vendor, and other supply chain dependencies.

The guidance provides suggestions on how organizations can use controls and measures to mitigate AI-related threats, including: risk assessments and risk-based programs, policies, procedures and plans; third-party service provider and vendor management; access controls; and cybersecurity training, monitoring, and data management. DFS suggests that AI threats are evolving, and “it is vital for Covered Entities to review and reevaluate their cybersecurity programs and controls at regular intervals, as required by Part 500.” Although the guidance does not impose any additional compliance obligations, in the event of a DFS audit, these basic measures will no doubt be evaluated. Whether your organization is a DFS-regulated entity or not, the guidance is basic cybersecurity hygiene for any organization when it comes to the risks of AI and mitigating those risks, so it’s worth a look.