Digital transformation is so pervasive across industries and sectors that even some of the most rigid institutions are trying to keep up with the benefits of new technologies. A key example of this shift is in finance and banking, where the increased use of application programming interfaces, or APIs, have revolutionised financial products and services.
APIs serve as the bridge between an established financial firm and third-party providers, such as challenger banks. This dynamic is known as open banking, and a significant policy push in 2010 by the UK and the EU not only encouraged banks to open up their data, but actually required it in an attempt to foster an increase in innovative financial products.
In the decade that has passed since those regulations have been passed, FinTech start-ups and challenger banks have relied on APIs to connect services and transfer data to provide customers with new offerings. However, despite the advances in financial products, APIs still remain relatively insecure and potentially risky. As the bridge between the gaps, APIs are common targets for cyberattackers, who use credential attacks and other methods to breach an organisation’s defences and steal personal data.
Therefore, both financial institutions and open banking organisations must remain on top of their cybersecurity measures. Any new versions or updates to current APIs should be designed with security in mind, using concepts such as multi-factor authentication, tokens or ensuring that any processes are encrypted. Additionally, using tools to constantly monitor emerging cybersecurity threats is a strong step, allowing your security team to patch vulnerabilities that may arise and manage any breaches to assure business continuity.
Innovations within the financial sector will continue to provide consumers with expanded options and offerings. Given this trajectory, it is important to ensure that these APIs are as secure as possible as financial institutions, start-ups and other third parties continue to evolve.