In the digital realm, where every customer, partner, and vendor interaction is facilitated by an Application Programming Interface (API), a new and urgent security challenge has emerged. While organizations have traditionally focused on familiar, known risks like phishing and ransomware, the attack surface is evolving at a rapid pace. Attackers have discovered a simpler and more direct path to sensitive data: directly targeting APIs. This tactical shift has made API security an implicit and, in many cases, explicit requirement for data protection and compliance. Even when specific language about APIs is not included in regulations, their clear role as an attack vector implies that their adequate protection is necessary. This is because APIs are the facilitators of rapid information exchange, often including sensitive data. The emergence of APIs as a major compliance issue is not surprising. They are often exposed or misconfigured, easy to compromise, and frequently unprotected. The consequences of a single breach can be severe, with just one compromised API potentially resulting in millions of stolen records.
The numbers underscore the severity of this issue. According to a 2023 report from Akamai Technologies, a staggering 78% of organizations have experienced an API security incident. Even more concerning, 44% of organizations have been fined by regulators for such incidents. This highlights a critical disconnect: while APIs are at the core of our digital products and services, our security and compliance programs are not keeping pace. Regulators now need to see that an organization is taking measures to protect all access points to sensitive data. This means you must be able to account for every API, including elusive "shadow APIs," uncover and fix any vulnerabilities, and apply controls specifically designed to prevent API-centric data breaches.
Beyond the Gateway: The Limits of Traditional Security Tools
Many organizations rely on API gateways and Web Application Firewalls (WAFs) for baseline protection, but these tools are not designed for the level of visibility and real-time protection that modern API ecosystems demand. Their primary limitation is that they can only observe managed API traffic that is routed through them. They cannot protect unmanaged APIs, which analysts predict will make up nearly half of a typical enterprise's API ecosystem by 2025. This lack of visibility means security teams are often unprepared, unaware of where APIs are routed, what data they exchange, and the risks they pose.
This vulnerability is a ticking time bomb. According to Akamai Technologies, only 4 in 10 security professionals with full API inventories know which of their APIs return sensitive data. This alarming statistic, coupled with the ease of conducting API attacks, suggests that data breaches via APIs will only continue to rise. The document provides examples of how API breaches can affect a company's compliance posture. One example details a popular project management application where an attacker exploited an API endpoint lacking authentication controls, gaining unauthorized access to millions of users' information and later leaking over 21 GB of data. Another case involved a telecom firm where more than 11 million customer records were exposed due to an API that was unknowingly exposed to the internet and did not require authentication. The document also mentions a social media company that received a $5 billion fine because a third-party vendor used the company's API to gather sensitive data. The company was fined not because the vendor abused the API, but because the company failed to monitor its application.
Navigating the Regulatory Maze: Implicit and Explicit Requirements
While some regulations are starting to include specific language about securing, assessing, or inventorying APIs, many still use broad language that carries implicit requirements for API protection. The onus is on the organization to determine and demonstrate what security controls are necessary to protect the sensitive data flowing through their APIs.
Some key regulations and frameworks and their direct implications for API security:
- Payment Card Industry Data Security Standard (PCI DSS) v4.0: This is a global standard for protecting payment data. If your business accepts major credit cards and processes, stores, or transmits cardholder data, you must comply. PCI DSS v4.0 offers guidance to confirm that an organization's software securely uses functions of external components, including APIs that transmit payment data from a mobile app to a bank's system. Compliance now requires adapting to the fact that attackers frequently target the thousands of APIs living within payment technologies. Best practices for compliance with requirement 6.2.3 include confirming the security posture of API-based components, building a full inventory of all APIs, and validating the security of your API code before it goes into production.
- General Data Protection Regulation (GDPR): This EU legislation aims to strengthen and unify data protection for individuals within the EU. It applies to any organization offering consumer goods or services in the EU. Since APIs are likely exchanging GDPR-regulated data like names, contact information, and IP addresses, organizations must factor data protection into API design from the start. For existing APIs, GDPR compliance requires discovering every API in the IT environment, assessing their risk factors, remediating vulnerabilities, and continuously testing them for resilience against attacks.
- Digital Operational Resiliency Act (DORA): DORA, designed to help the EU financial sector withstand and recover from cyberattacks, requires organizations to implement regular testing programs to find potential gaps, vulnerabilities, and deficiencies in digital operational stability. It explicitly outlines that this includes web-based application and API tests. The act references the Open Worldwide Application Security Project (OWASP) Top 10 API Security Risks to help organizations identify configuration errors, weaknesses, and logic flaws.
- Health Insurance and Portability and Accountability Act (HIPAA): Even without explicitly mentioning APIs, HIPAA's focus on safeguarding Protected Health Information (PHI) has significant implications for them. HIPAA's Privacy Rule requires covered entities to restrict access to PHI based on specific roles, which means API developers must embed technical safeguards like authentication and role-based access controls to ensure the principle of least privilege is in place. Organizations also need real-time assessment and reporting on each API's risk posture, including the types of PHI they transmit.
- Network and Information Security Directive (NIS2): This EU directive does not specifically name APIs, but their protection is integral to the functioning of many digital services in the organizations subject to the directive. NIS2 places a new emphasis on securing supply chains. As APIs are frequently used to integrate external services, ensuring their security is central to compliance. NIS2 also mandates the reporting of significant cybersecurity incidents, including API breaches.
- FFIEC Guidance for U.S. financial regulators: The Federal Financial Institutions Examination Council (FFIEC) creates guidance and standards for federal regulators to oversee the U.S. financial industry. The FFIEC's guidance explicitly calls for building an inventory of all information systems, including APIs, that require authentication and access controls. This is a key example of a document that provides specific guidance on how to secure APIs to protect consumers from fraud and identity theft.
The Path Forward: A Comprehensive Approach to API Security
To meet these compliance challenges and secure your organization, a holistic approach is necessary. Relying on piecemeal solutions is no longer sufficient. A complete API security solution should provide four key capabilities:
- API Discovery: It's not uncommon to have APIs that no one knows about. A complete and accurate inventory of all APIs, regardless of configuration or type, is the foundation of any security program. This includes locating forgotten, neglected, and dormant APIs to eliminate blind spots and potential attack paths.
- API Posture Management: Once discovered, you must understand the risks associated with your APIs. Posture management provides a comprehensive view of traffic, code, and configurations to assess your security. It involves automatically scanning for misconfigurations and hidden risks, identifying which APIs and internal users can access sensitive data, and prioritizing remediation by assigning severity rankings to issues.
- API Runtime Security: For all live APIs, real-time protection is non-negotiable. This means monitoring for data tampering, leakage, policy violations, and suspicious behavior. An effective solution can analyze API traffic without complex network changes and prevent attacks with automated or semi-automated remediation.
- API Security Testing: The most effective way to prevent breaches is to find vulnerabilities before they enter production. Integrating automated security tests into the development pipeline can simulate malicious traffic and ensure your APIs comply with established governance policies from the start.
The era of assuming that traditional security tools can handle API risks is over. APIs are a leading cause of the data breaches that modern regulations are designed to prevent. By implementing a comprehensive API security solution that covers discovery, posture management, runtime protection, and security testing, organizations can not only meet complex compliance requirements but also build the trust necessary to thrive in an increasingly connected world.