What Is API Compliance?

API compliance risk is comparable to compliance risk that arises from applications, networks, and data. For example, HIPAA specifies that healthcare companies must protect the privacy of patient health records. This means, among other things, storing those records in systems the company owns, with certain kinds of security controls in place. If there is an API connecting an electronic health record (EHR) system to another system, such as patient billing software, the API must adhere to those controls. If the API does not support the controls, such as by exposing the EHRs to unauthorized access, then the healthcare company is exposed to API compliance risk.

To succeed with API compliance, API owners and their partners in cybersecurity must make sure that their APIs are protecting any sensitive data exposed by those APIs. Depending on the regulation, that might mean making sure that controls are in place to protect data from being mishandled, exfiltrated, modified or lost. 

This may sound like a major workload, but the good news is that much of API compliance is already covered by API security processes and countermeasures. For example, API security testing can usually uncover vulnerabilities and misconfigurations that would lead to a compliance problem. 

The challenge is to connect security steps with compliance. A compliance auditor, for instance, might want to see documentation of how an API prevents excessive data exposure or controls user- and function-level authorization. The API manager has to identify the relevant security control and establish that it is addressing a requirement of a compliance framework.

API compliance is important for multiple reasons. First is the law itself. A company that is not complying with regulations is, at some level, breaking the law. In the case of the Sarbanes–Oxley Act (SOX), there are even criminal penalties for deliberate noncompliance. For almost all regulatory programs, there are financial penalties from the government for noncompliance. These can be more than the proverbial “slap on the wrist.” A violation of the European Union’s General Data Protection Regulation (GDPR) on privacy can run into millions of euros. 

Then there is the reputational damage that can come from being found noncompliant with regulations. A financial firm, for instance, will struggle to regain credibility and client trust if a data breach exposes client information to malicious actors. Paying a hefty regulatory fine, too, is embarrassing and makes a firm look like it’s not well run. 

Costs are a factor in compliance violations, as well. Running afoul of regulatory authorities almost always translates into legal bills, expensive public relations campaigns, and remediation projects like mass mailings and the like. Even the basic ability to be in business can be at risk. For instance, if a company cannot process credit cards because it failed to comply with industry standards for consumer data protection, that’s a company that may struggle to remain a going concern.

APIs factor into nearly every data compliance standard. These include:

• GDPR is a set of regulations covering privacy and security for consumer PII in the EU. Applications and data management systems, along with any APIs they expose or interact with, must comply with the law. GDPR requires companies that hold PII to be so-called “data custodians” to protect consumer data from breach, know what PII they have, and allow consumers the “right to be forgotten” by deleting their data. The California Consumer Privacy Act (CCPA) in the U.S. is a comparable regulation.
• Payment Card Industry Data Security Standard (PCI DSS) applies to any entity that handles consumers’ financial information from credit and debit card transactions. PCI DSS sets out strict controls, verified by audits, to ensure that “enterprises that receive, process, keep, or transmit credit card data operate in a safe and secure environment.”
• HIPAA protects the security and privacy of health data in electronic form.
• ISO/IEC 27001 offers a broad-based framework for information security. Companies may elect to comply with ISO 27001 to demonstrate their level of security.
• System and Organization Controls (SOC) is a suite of auditing reports from the American Institute of Certified Public Accountants (AICPA) that prove that a business has passed an in-depth audit process, following security requirements. 

In addition, API compliance comes up when trying to adhere to regulations covering the operations of financial firms, defense contractors, and firms in other regulated industries. 

API compliance will be part of the job description for API owners and security managers at companies that must comply with government regulations or obligatory industry standards. APIs may expose sensitive PII and financial data that is covered by these rules. It’s a serious matter, given the potential for high fines, remediation costs, and reputation damage. It is possible to achieve a large proportion of API compliance, however, through existing API security practices and controls.

API compliance goes beyond just following regulations; it requires the integration of robust security controls to prevent data breaches, unauthorized access, and other cyberattacks. By implementing strong authentication mechanisms and access control policies, organizations can protect sensitive data transmitted through their APIs.

Authentication and authorization: Implementing authentication protocols such as OAuth 2.0 ensures that only authorized users and systems can access your API endpoints. This control minimizes the risk of cyberattacks targeting personal data or financial transactions, particularly in sectors like financial services and healthcare, where regulatory compliance is paramount. Combining authentication tokens with stringent authorization policies allows you to control who can access specific data or functionalities within your API, adhering to compliance frameworks such as GDPR, HIPAA, and PCI DSS.

API gateway as a compliance enforcer: An API gateway serves as the gatekeeper of API traffic, ensuring that all API calls are properly authenticated and authorized. The gateway can also enforce rate limiting and traffic monitoring, detecting any anomalies or signs of unauthorized access attempts. This helps organizations meet compliance requirements by preventing excessive data exposure and mitigating the risk of data breaches.

The Open Worldwide Application Security Project (OWASP) provides critical guidelines for securing APIs and ensuring compliance with regulatory standards. Adhering to OWASP best practices is crucial for minimizing the risk of API vulnerabilities that could lead to security breaches and noncompliance.

Protecting personal data: OWASP recommends securing API endpoints through proper authentication and encryption mechanisms to protect sensitive personal data. Implementing input validation, for example, ensures that attackers cannot manipulate API calls to gain unauthorized access. This is especially important for APIs handling PII, where compliance with GDPR or CCPA is mandatory.

Reducing the attack surface: OWASP advises minimizing the exposed attack surface by limiting the number of exposed API endpoints and securing them using strong authentication and authorization measures. By following these best practices, organizations can maintain compliance and ensure that their APIs are resilient against emerging threats like denial-of-service (DoS) attacks and ARP spoofing.