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Application programming interfaces (APIs) are crucial to how fintech platforms work. Separate banking and financial systems need efficient and standardized ways to communicate with each other, which APIs provide. However, these integrations can also pose security risks.
Many APIs come from third-party developers, so they may contain vulnerabilities. Alternatively, if you’re building your own API, it’s easy to miss important cybersecurity steps while focusing on efficiency and interoperability. These missteps can lead to catastrophic consequences when people’s finances are at stake. Following these five tips for secure fintech API integrations is essential.
1. Embrace DevSecOps
API developers should follow a DevSecOps approach. DevSecOps takes DevOps’s rapid iteration and frequent communication and brings cybersecurity professionals into the mix to ensure security by design.
This hybrid development method has a few critical advantages. First, as with conventional DevOps, it produces less downtime and fewer bugs by aligning all teams from the start. As a result, vulnerabilities from human error or glitches are less likely.
Secondly, DevSecOps ensures the API follows a security-first design. Instead of applying protections after the fact — which can lead to ill-fitting defenses and unnoticed vulnerabilities — it builds the software around necessary cybersecurity steps. Frequent testing through the dev cycle also means teams will catch and patch more issues before the API can affect real-world users.
2. Implement an API Gateway
When it comes time to integrate an API into a fintech platform, you should use an API gateway. A gateway acts as the sole place where APIs interface with the rest of the platform. This centralization allows you to implement consistent authentication policies and other cybersecurity standards across all plugins.
The average app uses between 26 and 50 APIs, all of which may have different levels of encryption, authentication, regulatory compliance and data formats. Such variety is bad news for cybersecurity since it makes enforcing even security across the board or monitoring all data flows harder. Gateways offer a solution.
When all API traffic flows through the same place, you can keep a closer eye on data transmissions to catch suspicious behavior and enforce access policies. Your gateway can also standardize data transfers and cybersecurity protocols to keep things cohesive despite relying on assets from multiple third-party developers.
3. Adopt a Zero-Trust Mindset
While an API gateway can improve your platform’s ability to prevent breaches, even the most thorough gateway isn’t impenetrable. Given how sensitive fintech data is, zero-trust architecture is necessary.
Zero-trust verifies all assets, users and data requests before allowing any actions. While that may seem extreme, breaches take 178 days to detect on average, so relying on proactive and scrutinous methods may help you catch potential attacks before it’s too late.
Implementing zero-trust means designing your platform around multiple verification stops and allowing security tools to monitor all API traffic. This can result in longer dev cycles and higher costs, but it’s worth it in light of the costs of a breach.
4. Protect Sensitive API Data
You should also ensure that all data flowing in and out of API integrations remains as private as possible. Even trustworthy, verified assets or accounts can pose risks through errors or takeover, but removing sensitive details from data can make these hazards less impactful.
Encryption is the first step. The FTC requires financial institutions to encrypt user data but doesn’t specify which cryptography standards to use. It’s safest from both a regulatory and cybersecurity standpoint to go for the highest available option — in most cases, AES-256. Quantum-resistant encryption methods are also worth looking into.
Tokenization may be necessary for the most sensitive details APIs may access, such as bank account numbers. Replacing high-value data with a stand-in that’s useless outside of the platform stops APIs from accidentally exposing critical information.
5. Review API Security Regularly
API security is not a one-time fix. As with all cybersecurity concerns, it’s an ongoing process that requires regular review to ensure your protections are up to date regarding emerging threats and changing best practices.
The Gramm-Leach-Bliley Act requires regular testing and monitoring of financial companies’ cybersecurity systems. Beyond being a regulatory matter, auditing your API security at least once annually is a good idea, as the security landscape changes frequently.
Consider hiring a penetration tester or third-party auditing firm to assess your platform’s API security regularly. While you can and should review your own security practices, an experienced outside entity can apply more scrutiny and offer deeper insights.
Secure Your Fintech APIs
APIs are not the enemy, but they do deserve attention and care. While these plugins are crucial to a well-functioning fintech platform, any vulnerabilities among them can quickly counteract their benefits if you don’t follow strict API security protocols.
These five steps form the foundation for secure fintech API integration. Once you implement these practices, you can carve a path toward a safer platform.
