The last several months have seen a number of new, and relatively expansive, cyber regulations. Last October, the Depart of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an advisory explaining that existing incident reporting requirements under the Bank Secrecy Act (BSA) apply to cyber events and cyber-enabled fraud.1 In December, the New York State Department of Financial Services (DFS) issued a revised proposed regulation (Part 500) requiring, among other things, rapid reporting of cybersecurity incidents that are likely to have a material effect on the business.2
As with other regulatory developments, these new rules will require organizations to enhance many aspects of their cybersecurity programs, including authentication controls, recovery time objectives, and third-party risk management. However, the combination of incident reporting requirements from both FinCEN’s advisory and DFS’s Part 500 demands a level of convergence between financial fraud and cyber controls in the banking industry heretofore unseen.
