How to improve third-party API integration security

The importance of third-party APIs

Third-party APIs are essential for digital transformation, enabling companies to enhance their offerings, integrate with popular platforms and use advanced technologies without building everything in-house.

The benefits of third-party APIs range from enhancing UX to improving operational efficiency. For example, e-commerce platforms might use APIs to integrate payment gateways, track shipments or personalize UX. Marketing teams might rely on APIs for social media integration or customer analytics.

These integrations save development time, reduce costs and enable businesses to adapt rapidly to market changes.

Top third-party API risks

Reliance on third-party APIs means companies are effectively extending their IT environments into external systems, which can introduce new security issues potentially out of their control. Consider the following API risks:

• Data exposure. Third-party APIs often require access to sensitive information, such as customer data or financial records. If these APIs are not secure or if the third-party provider lacks strong security measures, data could be exposed to unauthorized access, theft or misuse.
• Compliance violations. Many organizations operate under strict regulations, such as GDPR, CCPA and HIPAA. Using third-party APIs without proper controls could lead to accidental data sharing across borders or unauthorized access, resulting in compliance violations and significant fines.
• Dependent on external security practices. When organizations rely on third-party APIs, they can inherit the API provider's security practices -- or lack thereof. The organization could become an unintentional victim if the third-party provider experiences a breach or does not follow secure development practices, such as with Log4j.
• Lack of visibility and control. With third-party APIs, organizations have limited visibility into how data is processed and stored. This lack of control makes it difficult to detect malicious activity or identify where and when sensitive data might be at risk.

How to mitigate third-party API risks

Organizations need a proactive approach to third-party API security to reduce these risks. Here are some actionable strategies companies should consider implementing to improve third-party API security integration.

Perform thorough vendor assessments

Conduct a detailed assessment of the vendor's security posture before integrating a third-party API. Look for compliance certifications, ask about data handling practices and evaluate the vendor's history of data breaches or vulnerabilities. In fact, insist on getting a list of vendors' partner certifications.

Implement strong authentication and access controls

Use strong MFA for any API access. Additionally, apply the principle of least privilege to limit access to only those employees or systems that require it. Store API keys and tokens securely, rotate them regularly and deactivate them when no longer needed.

Monitor API usage and activity

Employ tools to monitor API traffic and detect unusual patterns, such as large data transfers or frequent access requests. Monitoring helps identify potential misuse or attempts at unauthorized access. Logging API activity is also essential for auditing and post-incident investigations.

Use rate limiting

Set rate limits on APIs to prevent excessive requests from causing system overload or data extraction. This helps protect against certain types of attacks, such as DoS attacks and brute-force attempts.

Adopt data encryption

Encrypt all data, both in transit and at rest, transmitted through third-party APIs. Encryption safeguards data against interception during transmission and unauthorized access on the provider's side.

Review and update APIs regularly

The security landscape changes rapidly, and once-secure APIs could become vulnerable over time. Regularly review third-party APIs for security patches or updates from the provider. Work with vendors to ensure they are addressing new threats.

Establish a contingency plan

Despite best efforts, incidents can still occur. Have a clear response plan that outlines steps to take if a third-party API breach impacts the organization. The plan should include communication protocols, steps to isolate affected systems and procedures for notifying affected stakeholders.

Jerald Murphy is senior vice president of research and consulting with Nemertes Research. With more than three decades of technology experience, Murphy has worked on a range of technology topics, including neural networking research, integrated circuit design, computer programming and global data center design. He was also the CEO of a managed services company.