New York Department of Financial Services Issues New Guidance on Multi-Factor Authentication and Cybersecurity Frameworks

With cyberattacks continuing to plague the financial services industry, the New York Department of Financial Services (NYDFS) recently released new guidance for regulated entities related to the use of Multi-Factor Authentication (MFA) and cybersecurity frameworks.

On December 7, 2021, NYDFS issued a formal Industry Letter entitled Guidance on Multi-Factor Authentication. According to the Industry Letter, MFA “is an essential part of cybersecurity hygiene . . . which is why it was one of the few technical controls explicitly required by” the NYDFS Cybersecurity Regulation, 23 NYCRR Part 500 (the Cybersecurity Regulation). However, the Industry Letter goes on to note that “MFA weaknesses are the most common cybersecurity gap exploited at financial services companies,” most often due to MFA “being absent, not fully implemented, or configured improperly.” Specifically, NYDFS noted that, from January 2020 to July 2021, more than 18.3 million consumers were impacted by cybersecurity incidents reported to NYDFS that were linked to an MFA failure.