Lawsky turns attention to cybersecurity

New York’s chief financial regulator is making cybersecurity a top priority for the foreseeable future.  

On Tuesday, New York State Superintendent of Financial Services Benjamin Lawsky said that cybersecurity will be a priority area for his office through this year and next.

Speaking at a Dow Jones Risk & Compliance forum, Lawsky said the initiative “is less of an enforcement issue and more of getting all the institutions we regulate to up their game, and there’s a lot they can do,” the Wall Street Journal reported him saying.

While Lawsky is not a direct supervisor of private equity, his office’s responsibility for New York’s multitrillion banking and insurance industry creates indirect oversight powers. Last May, for instance, Lawsky revealed efforts to place more regulatory scrutiny on private equity firms and other groups purchasing insurance companies.

His recent comments dovetail with a speech he made in February at New York’s Columbia Law School.

“I am deeply worried that we are soon going to see a major cyber-attack aimed at the financial system that is going to make all of us to shudder,” said Lawsky during his speech. “Cyber hacking could represent a systemic risk to our financial markets by creating a run or panic that spills over into the broader economy.”

Similar to what the Securities and Exchange Commission is asking registered GPs to do, Lawsky is urging banks, insurers and other financial institutions to regularly review their cybersecurity readiness as well as the digital vulnerabilities of their third-party vendors.