By Sulaiman Braimah, Manager, Info-Sec Admin Security, Qore.
As the world evolves with the rapid adoption of technology, cybersecurity has become a major concern for financial institutions. These institutions rely heavily on advanced technology to deliver excellent services to their customers, which has increased the security threats to their systems as they have critical data to protect. The goal of this article is to highlight the importance of API security within financial institutions and outline methods they can adopt to safeguard their data.
What are APIs?
APIs, or Application Programming Interfaces, are essential tools that allow different software applications to communicate with each other. They can also be known as the lifeline of any software application. They connect systems, enable seamless user experiences, and drive business growth by facilitating rapid development and integration. In the financial sector, APIs enable seamless integration between various systems, facilitating everything from online banking to payment processing. It is important to note that due to the integration of various systems, security risks are on the rise. API security involves protecting these interfaces from unauthorized access and ensuring that data exchanged through APIs is secure.
Understanding API Security
API security can simply be defined as the methods and practices of reducing attacks on a system that occur due to inadequate API security implementation. It is the prevention of attacks that originate at the API level, and it is a crucial pillar of any organization’s overall security strategy. It is important that APIs are secure to eliminate risks and threats from attackers who can compromise an application’s security posture.
A major concern when dealing with APIs is the vulnerability of third-party applications. Many third-party providers do not implement robust security measures, making them attractive targets for cybercriminals. These risks can lead to significant financial losses and damage to a financial institution’s reputation.
By prioritizing API security, financial institutions can safeguard their operations, protect their customers, and comply with regulatory standards, all while fostering innovation and maintaining trust.
Some Key API Security Vulnerabilities & Mitigation Strategies
1. Broken Object Level Authorization (BOLA) – Most Critical Risk: Attackers manipulate API object identifiers to access unauthorized accounts, transaction records, or customer data.
Best Practices & Recommendations:
- Implement Object-Level Authorization Checks; Enforce role-based access control for every API request.
- Use Secure Object References; Replace direct object IDs with hashed, tokenized, or opaque identifiers.
2. Broken Authentication Risk: Weak authentication mechanisms allow attackers to take over customer accounts, initiate fraudulent transactions, or access banking services without authorization.
Best Practices & Recommendations:
- Enforce Strong Authentication; Implement Multi-Factor Authentication (MFA) for API access.
- Implement Rate Limiting on Login Attempts; Prevent brute-force attacks using progressive delays and account lockouts.
3. Excessive Data Exposure Risk: APIs unintentionally expose more data than required, leading to sensitive information leaks (customer PII, transaction history, account balances, etc.).
Best Practices & Recommendations:
- Use Data Filtering & Response Validation; Only return the minimum necessary data required for the transaction.
- Mask or Encrypt Sensitive Fields; Protect credit card numbers, PINs, and personal details in API responses.
4. Unrestricted Resource Consumption (Denial-of-Service via API Abuse) Risk: Attackers can flood API endpoints with excessive requests, disrupting banking services and depleting system resources.
Best Practices & Recommendations:
- Use Web Application Firewalls (WAFs) & Bot Detection to block automated abuse and malicious API traffic.
5. Broken Function Level Authorization Risk: Attackers escalate privileges to access unauthorized API functions (e.g., initiating unauthorized wire transfers).
Best Practices & Recommendations:
- Regularly Test for Privilege Escalation using Dynamic Application Security Testing (DAST) tools.
6. Unrestricted Access to Sensitive Business Flows Risk: APIs exposing core banking functionalities (e.g., fund transfers, loan approvals) can be exploited without security checks.
Best Practices & Recommendations:
- Use Transaction Limits & Multi-Signature Approvals for fund movements.
- Implement Real-Time Fraud Detection for API-Based Transactions.
7. Server-Side Request Forgery (SSRF) Risk: Attackers exploit APIs to force internal servers to make unauthorized requests to sensitive internal or third-party systems.
Best Practices & Recommendations:
- Restrict Outbound API Requests; Use firewall rules and allowlists.
- Validate & Sanitize User Inputs to prevent malicious URL injection.
- Implement Network Segmentation & API Gateway Security.
8. Security Misconfiguration Risk: Default or misconfigured API settings (e.g., exposing API keys, using weak TLS settings) create security gaps.
Best Practices & Recommendations:
- Disable Unused API Endpoints & Methods.
- Automate API Security Testing in CI/CD Pipelines.
9. Improper Inventory Management Risk: Untracked API endpoints (e.g., deprecated or shadow APIs) expose vulnerabilities.
Best Practices & Recommendations:
- Maintain an Up-to-Date API Inventory (Map all active and deprecated endpoints).
- Use API Security Testing & Discovery Tools (e.g., Postman, OWASP API Security Project).
What is Qore's Approach to API Security?
At Qore, we ensure secure, scalable, and resilient digital banking APIs. As a modern financial technology platform, Qore enables financial institutions to seamlessly integrate and operate within the financial ecosystem. Given the growing cyber threats targeting APIs, Qore prioritizes API security to ensure data confidentiality, integrity, and availability across its infrastructure.
API security is paramount for financial institutions to protect their critical data and maintain customer trust. By understanding the various vulnerabilities and implementing robust security measures, financial institutions can mitigate risks and ensure the integrity of their systems. Prioritizing API security not only safeguards operations but also fosters innovation and compliance with regulatory standards, ultimately contributing to a secure and resilient financial ecosystem.
References
API Security. (n.d.). Postman. https://www.postman.com/api-platform/api-security/
