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ARTICLE · 23 OCTOBER 2024

NYDFS Issues Letter Highlighting Cybersecurity Risks Of AI

McDermott Will & Emery
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On October 16, 2024, the New York State Department of Financial Services (NYDFS) published a letter to covered entities that calls attention to the risks posed by artificial intelligence (AI).

United StatesTechnology
Alexander Southwell
Alexander Southwell
Katelyn Ringrose
Katelyn Ringrose
John Ying
John Ying
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On October 16, 2024, the New York State Department of Financial Services (NYDFS) published a letter to covered entities that calls attention to the risks posed by artificial intelligence (AI). This non-binding guidance letter does not impose any new requirements but instead highlights AI-enabled cybersecurity risks to nonpublic information (NPI) and how certain portions of NYDFS's Part 500 regulations can combat those risks.

This letter is the latest example of NYDFS focusing on and providing guidance related to AI risks. In July 2024, NYDFS published a similar letter highlighting the risks of AI use in insurance underwriting and pricing. And NYDFS's efforts are part of a broader focus in New York to encourage responsible AI development, including Governor Kathy Hochul's focus on AI governance. Below, we summarize the risks NYDFS is concerned about and highlight several key takeaways.

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