NYDFS AI Compliance: Applying Part 500 Access, Audit, and Third-Party Controls to LLM Traffic
The NYDFS Cybersecurity Regulation, 23 NYCRR Part 500, requires covered financial entities to enforce least-privilege access, maintain audit trails, monitor authorized user activity, and govern third-party service providers. When employees and AI agents send data to LLMs, those requirements apply to the prompt traffic. NYDFS issued specific guidance in October 2024 on AI-related cybersecurity risks, and it maps to controls already in Part 500. This piece walks the Part 500 sections that land on AI inference traffic and shows how to enforce access and produce the audit trail the regulation requires.