New York Cyber Security Law Emphasizes Governance, Risk & Compliance
The first phase of the New York state cyber security regulations, which apply to insurance companies, banks, and other financial institutions operating within the state, went into effect at the beginning of March. While the insurance and finance industries are already subject to numerous cyber security-related standards and regulations, New York’s legislation represents the first time a state has mandated specific cyber security requirements.
Breaking Down the Requirements
If you want to read all 14 pages and 23 sections, you can download a PDF copy of the regulations here. The requirements, which are being phased in over a two-year period, mandate that organizations engage in proactive cyber security and GRC practices, such as:
- Conducting a comprehensive risk assessment and using the results to design and implement a cyber security program, a written cyber security policy, and a written incident response plan. Further, a separate cyber security policy must be established for third-party service providers.
- Designating a Chief Information Security Officer (CISO) and employing “qualified cybersecurity personnel,” either in-house or through a third-party provider, to perform information security-related functions.
- Providing all employees with ongoing cyber security awareness training, and providing cyber security employees with continuous training to keep them current in their field.
- Performing periodic penetration testing, vulnerability assessments, and risk assessments.
- Establishing appropriate system user access privileges, maintaining system audit trails, and utilizing technical controls such as multi-factor authentication and data encryption.
- Adhering to certain reporting, notification, and confidentiality requirements.
SMBs Fret Over Complying with New York State Cyber Security Law
Most affected organizations have until August 28, 2017, to implement the first phase of the New York State cyber security regulations, including the cyber security policy, employee training program, incident response program, designating a CISO, and hiring qualified cyber security employees. Despite the fact that smaller firms — those with fewer than 10 employees and less than $10 million in assets and $5 million in gross revenues — are exempt from certain portions of the law, many small and medium-sized businesses are worried about their ability to comply.
Although the new law mirrors numerous existing cyber security frameworks and standards, such as ISO 27001, FFIEC, GLBA, NIST CSF, and OCC, as well as guidance from the FTC, many organizations have neglected information security for years. These firms will need to do some serious catching up — and they are not going to get away with simply updating a couple of lines in their existing policies or appointing the office manager the “CISO.” They will need to completely shift their mindset, overhaul their cyber security governance, policies, and plans, implement specific security controls and, in many cases, drastically increase their security budgets to pay for all of these changes.
Even for organizations that grasp the importance of proactive cyber security, compliance concerns are warranted. Not only are the law’s requirements quite involved, but they also require that firms hire or contract with qualified cyber security experts and a CISO. There is simply no getting around seeking out expert help. Meanwhile, there is a severe shortage of workers with cyber security skills. ESG Research reports that nearly half of all organizations cited “a problematic shortage of cyber security skills in 2016.” Even when organizations can locate qualified talent, they must pay top dollar to attract it. The New York state cyber security regulations are expected to shrink the talent pool even further and drive salaries even higher as multinational Wall Street finance companies with deep pockets snap up security analysts and engineers.
Automation and Outside Help Are Keys to Compliance
Most SMB’s, as well as more than a few large businesses, will find that hiring in-house cyber security talent is out of reach. The labor costs alone will break many smaller firms’ budgets — if they can even find qualified workers in the first place. Fortunately, organizations may fulfill the law’s personnel requirements, including the requirement for a CISO, by enlisting the services of a professional cyber security firm such as Continuum GRC. Outsourcing your organization’s cyber security and compliance ensures that you get the expert talent you need immediately and at a price that is far lower than hiring in-house employees. Further, your organization would not have to shoulder the burden of the continuous cyber security training that is required by the New York law.
Automation is also critical. Many organizations still use spreadsheet programs for their IT audits, compliance, and reporting. This time-consuming, inefficient, dysfunctional practice has been outdated for years — and the New York regulations are going to expose its weaknesses even more clearly. Now more than ever, organizations of all sizes must ditch manual IT audits, reporting, and GRC processes and use RegTech software such as Continuum GRC’s IT Audit Machine (ITAM). The ITAM can help you comply with the New York cyber security law by integrating your IT governance, policy management, risk management, compliance management, audit management, and incident management; creating, measuring, monitoring, and managing your IT governance programs; and providing clear visibility into key risk indicators, assessment results, and compliance initiatives, with integrated reporting of self-assessments, manual assessments, and automated controls.
New York Cyber Security Law Expected to Be Model for Other Industries & Localities
Even if your business is not located in New York state or operates outside of the finance and insurance industries, it is likely that these new regulations will eventually impact your business. First, because of the international reach of the finance and insurance industries in New York, other states and even other countries are expected to use the law as a model as they seek to stem the tide of data breaches, identity theft, and other forms of cyber crime. Second, the New York State cyber security regulations heavily emphasize governance, risk, and compliance processes that all organizations should be engaging in anyway, as part of their proactive cyber security plan.
Your organization does have a proactive cyber security plan, doesn’t it?
The cyber security experts at Continuum GRC have deep knowledge of the cyber security field, are continually monitoring the latest information security threats, and are committed to protecting your organization from security breaches. Continuum GRC offers full-service and in-house risk assessment and risk management subscriptions, and we help companies all around the world sustain proactive cyber security programs.
Continuum GRC is proactive cyber security®. Call 1–888–896–6207 to discuss your organization’s cyber security needs and find out how we can help your organization protect its systems and ensure compliance with the New York Cyber security regulations and all other applicable laws, frameworks, and standards.
Originally published at continuumgrc.com on March 16, 2017.