A company has three AWS Lambda functions written in Node.

Comprehensive and Detailed 250 to 300 words of Explanation (AWS-doc-aligned):

The most operationally efficient way to share and patch common dependencies across multiple Lambda functions is to use AWS Lambda layers. A Lambda layer is an independently managed deployment artifact that can contain libraries and other dependencies. Multiple functions can reference the same layer, which avoids packaging identical open source modules into each function bundle.

When a vulnerability or bug is found in a shared module, you patch it once by publishing a new layer version that contains the updated dependencies. Then you update each Lambda function configuration to reference the new layer version. This centralizes dependency management, reduces duplicated artifacts, and makes rollouts and rollbacks cleaner (you can switch layer versions quickly). It also keeps function deployment packages smaller, which often improves deployment speed and can reduce cold-start overhead associated with larger bundles.

The other options introduce unnecessary operational burden:

Downloading modules at cold start (CloudFront/S3) increases latency and adds failure modes at runtime.

Hosting a private registry on EC2 requires patching, scaling, availability management, and security hardening—high operational overhead.

A CloudFormation registry extension and daily scans are not a standard or efficient mechanism for packaging runtime Node.js dependencies into Lambda functions.

Lambda layers are a documented AWS-native feature intended for precisely this use case: sharing common code and libraries across functions while enabling controlled versioning. Therefore, creating a layer for the open source modules and updating the functions to consume the layer is the most efficient and maintainable approach.