Business Impacts of API Security Breaches

Since APIs have become the most common method for inter-application communication, their ubiquity, flexibility, and public availability have made them a prime target for bad actors. Attacks on APIs stemming from vulnerabilities such as lack of authentication or sensitive data leakage have wide-ranging and profound implications for organizations and their customers. Thus, it’s critical for organizations to know what APIs are in use and where they are, ensure that they’re secure and in compliance, and that any and all threats are identified and mitigated. Without all three of those pillars of API protection, attacks and breaches can – and likely will – occur.

Business impacts resulting from successful API attacks often include:

1. Revenue and Other Financial Impacts:
   • Direct Costs: Breaches can result in direct costs related to fraud, incident response, forensic investigations, and legal fees.
   • Loss of Business: A breach can take focus away from revenue-generating activities or trigger contractual penalties or refunds for service disruptions.
   • Regulatory Fines: Non-compliance with data protection regulations (like GDPR or HIPAA) can result in hefty fines.
   • Increased Security Costs: Post-breach, organizations often ramp up their security investments in security solutions and personnel.
   • Customer Protection Costs: Breached organizations often must provide affected parties with credit monitoring or identity protection services.
2.  Data Exposure and Data Loss:
   • Sensitive Customer Information: APIs often provide access to sensitive customer data, such as personal information or financial records.
   • Proprietary Intellectual Property: A serious breach may lead to the loss of proprietary intellectual property, harming the organization both fiscally and strategically.
   • Data Manipulation: Beyond just accessing data, malicious actors might alter, delete, or add data, leading to data integrity issues.
3.  Reputational Damage:
   • Long-term Brand Damage: It can take years for organizations to recover from the reputational damage caused by a breach.
   • Loss of Trust: Customers, partners, and stakeholders might lose trust in an organization that fails to secure its APIs.
   • Negative Publicity: Breaches often attract media attention, leading to negative publicity and brand damage.
4.  Operational Disruptions:
   • Service Downtime: A breach or vulnerability exploitation might disrupt the normal functioning of services, leading to downtime, directly affecting the bottom line.
   • Resource Diversion: Post-breach, significant organizational resources may be diverted to handle the crisis and response, negatively affecting other operations.
5.  Third-Party Risks:
   •  Supply Chain Attacks: If an organization’s API is compromised, it can be used as a launchpad to attack other organizations, especially when integrated with third-party systems, which can lead to strained or broken partnerships and legal consequences.

Play Offense, Not Defense (or Best Practices to Not Be in Recovery)

The implications of API breaches are vast and can affect many facets of an organization, from engineering to marketing to finance to legal. Investing in proper API security and bot management goes a long way to preventing the consequences outlined above. API security encompasses the three pillars of API protection mentioned previously, which boil down to discover, comply, and protect. Discovering all APIs and where they are, ensuring that those APIs are secure and in compliance, and protecting them from attacks.

Organizations should follow API security best practices and ensure their APIs are compliant with frameworks such as the OWASP API Security Top 10, but that’s the minimum – they should go further and be prepared for known attacks as well as emerging threats.

The good news here is that the situation is not all “stick” – there’s “carrot” in here as well. By virtue of stopping malicious traffic from ever touching the organization’s applications, the performance of those applications will improve, sometimes dramatically, to the delight of your users/customers. Additionally, when applications are bombarded with bad traffic, there can be very real financial penalties, even when the attack fails to “succeed”. As attacks scale, the targeted application process takes a hit on CPU, memory, and storage utilization that your cloud provider bills for as the application continually consumes more of the above. It’s simply better all the way around to invest a bit up front rather than paying the downstream consequences.

Hopefully understanding the business consequences of poor API security is a sufficient motivator to employ proactive API security measures along with continuous monitoring and real-time attack mitigation. The chosen solution should address the entire API lifecycle (discover, comply, protect). If you’d like to learn more about the Cequence Unified API Protection solution, it’s easy to get started – there’s even a free assessment service available.

Learn more and get started for free with an API security assessment.