Understanding NYDFS and why it matters

The New York Department of Financial Services (NYDFS) oversees the safety and resilience of New York’s vast financial sector. Created in 2011 to modernize oversight of banks, insurers, and emerging fintech organizations, the NYDFS regulates thousands of institutions that handle everything from traditional banking to cryptocurrency. As technology became central to financial operations, NYDFS introduced 23 NYCRR Part 500, a landmark cybersecurity regulation designed to safeguard sensitive data and strengthen cyber defenses across regulated organizations and their third-party service providers.

Under NYDFS 500, covered entities must implement a written, board-approved cybersecurity program that includes:

• A designated CISO

• Written cybersecurity policies

• Technical controls such as MFA, encryption, monitoring, and EDR

• Incident response planning and mandatory incident reporting

• Oversight of third-party vendors

• Annual certifications of compliance

Initially issued in 2017, the regulation was most recently updated in 2023 to include more precise definitions, stricter control requirements, and more aggressive incident-reporting timelines. NYDFS emphasizes that threat actors have become more numerous and sophisticated, while modern cybersecurity controls are increasingly accessible. As a result, penalties for non-compliance are steep, ranging from $1,000 to $75,000 per day, with several organizations fined over $1 million since 2023.

How Chainguard helps organizations comply with NYDFS 500

A successful NYDFS compliance program relies on evidence-based, auditable documentation, something modern DevOps environments often struggle with due to the speed and complexity of cloud-native software. Open source software (OSS), in particular, introduces large dependency graphs, opaque provenance, and a constantly shifting CVE landscape.

Chainguard solves these challenges by providing a catalog of minimal, secure, continuously maintained OSS artifacts backed by SLAs for vulnerability remediation. Combined with automated SBOMs, attestations, and centralized artifact storage, Chainguard enables organizations to produce verifiable, repeatable evidence for NYDFS requirements across their CI/CD pipelines.

Examples of Chainguard-enabled compliance evidence

• Complete, attested SBOMs documenting all packages and changes to container images

• Correlated CVE reports with remediation history

• Centralized, immutable artifact storage for audits, traceability, and reproducibility

• Historical CVE trend reporting to support management reviews and compliance reporting

NYDFS requirements and Chainguard support

Chainguard provides direct support for key sections of NYDFS 500, including:

• § 500.3(c) Asset Inventory: SBOMs with full software inventories and signed provenance

• § 500.3(d) Access Controls: Rootless containers, deny-all defaults, and removal of unnecessary modules

• § 500.3(e) Business Continuity: SBOMs and artifact repositories for rapid rebuild and recovery

• § 500.3(f) System Operations: CVE dashboards with real-time visibility and SLA-backed remediation

• § 500.3(i) Systems & Application Security: Secure-by-default OSS, hardened configurations, and 7-day SLAs for severe CVEs

• § 500.3(m) Risk Assessment: Centralized CVE monitoring

• § 500.3(n) Incident Response: SBOMs and attestations for impact analysis and reporting

• § 500.3(o) Vulnerability Management: Historical artifact usage and CVE timelines

• § 500.5 Vulnerability Scanning: Automated scanning and nightly builds for rapid CVE elimination

• § 500.6 Audit Trail: Immutable SBOMs and traceable CVE history

• § 500.7 Access Privileges: No shell access, disabled root accounts, least-privilege defaults

Chainguard can also strengthen controls for additional NYDFS sections (e.g., 500.4, 500.13, 500.14, 500.16) when incorporated into broader cybersecurity policies.

Summary

NYDFS 500 aims to protect financial institutions from increasingly sophisticated cyber threats. For cloud-native environments, Chainguard provides the secure software supply chain foundation needed to meet the regulation’s expectations: zero-CVE, secure-by-default OSS components; complete SBOMs and attestations; and continuous visibility into historical and real-time vulnerabilities.

Organizations using Chainguard report:

• >97% reduction in CVEs across environments

• Dramatically improved audit readiness through automated evidence generation

• Significant engineering time saved by eliminating manual patching and triage

By incorporating Chainguard into NYDFS cybersecurity programs, enterprises can reduce risk, streamline compliance, and ensure continuous, verifiable security across modern infrastructure. If you are interested in learning more about how Chainguard can help you comply with NYDFS Part 500, get in touch with our team today.