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What is API Compliance? 8 Standards and How They Impact Your APIs

What Is API Compliance?

API compliance means complying with internal organizational governance as well as industry and regional regulations. It’s a business-critical priority, not just a technical requirement, as non-compliance can mean regulatory fines and data breaches, which can incur regulatory penalties, erode customer trust, and have a significant financial impact.

API compliance is defined as how an organization ensures that their APIs support the security and governance protocols defined by industry-specific requirements or regulations including PCI DSS, PSD2, GDPR, and EU AI Act, and others. An integral element in API security initiatives, API compliance helps guide security practitioners and developers to ensure the security of APIs, their applications, and the data transacted through them.

Why Are API Compliance Standards Important?

API compliance standards provide a common framework for protecting sensitive data and controlling how APIs are designed, deployed, and operated. They help organizations turn broad regulatory requirements into security controls that can be applied and verified across their API environments.

  • Protect sensitive data: Compliance standards define controls for handling personal, financial, healthcare, and other regulated data. These controls can include encryption, authentication, access restrictions, and secure data storage.
  • Reduce security risks: Requirements for access control, monitoring, vulnerability management, and secure development help reduce API attack surfaces and limit the impact of compromised credentials or endpoints.
  • Meet regulatory obligations: Standards and regulations such as PCI DSS, GDPR, PSD2, and the EU AI Act impose specific requirements on systems that process regulated data. APIs involved in those workflows must support the required controls.
  • Improve visibility and accountability: Compliance often requires organizations to maintain API inventories, audit logs, access records, and documented security policies. This makes it easier to identify API owners, track sensitive data flows, and investigate incidents.
  • Standardize API governance: Compliance requirements establish consistent security expectations across development teams and business units. Organizations can use these requirements as policy checks throughout the API lifecycle instead of evaluating security only before an audit.
  • Support audits and evidence collection: Continuous monitoring and documented controls provide evidence that security requirements are being enforced. This reduces manual work during audits and helps teams identify compliance gaps before they become violations.

What Are Some Common Compliance Frameworks and How Do They Apply to APIs?

1. GDPR

The General Data Protection Regulation (GDPR) applies to APIs that collect, process, store, or transmit personal data relating to individuals in the EU. For APIs, GDPR compliance largely comes down to controlling what personal data is exposed, ensuring that processing has an appropriate legal basis, and building privacy and security protections into the API lifecycle. GDPR specifically requires data protection by design and by default and appropriate technical and organizational security measures.

  • Data minimization: APIs should request and return only the personal data necessary for the intended purpose. Avoid overly broad response objects or unnecessary exposure of personally identifiable information (PII).
  • Authentication and authorization: Strong access controls should ensure that users, applications, and services can access only the personal data they are authorized to use.
  • Encryption and secure transmission: Personal data exposed through APIs should be appropriately protected in transit and at rest, using controls proportionate to the risk.
  • Privacy by design and default: Privacy requirements should be incorporated into API design, including endpoint behavior, default permissions, schemas, logging, retention, and downstream data sharing.
  • Data subject rights: APIs and supporting systems may need to enable workflows for access, correction, deletion, portability, and restriction of personal data.
  • Logging without excessive data exposure: API activity should be auditable, but organizations should avoid unnecessarily storing personal data, authentication secrets, or sensitive request payloads in logs.
  • Retention and deletion: API-generated data, logs, caches, and downstream copies should follow defined retention schedules and support deletion where required.
  • Third-party API governance: Organizations remain responsible for understanding how processors, SaaS applications, and other third parties receiving personal data through APIs handle that information.

2. PCI DSS 4.0

The Payment Card Industry Data Security Standard (PCI DSS) 4.x applies to environments that store, process, or transmit payment card data. APIs that handle cardholder data, authentication data, payment transactions, or access to the cardholder data environment therefore become part of the PCI DSS scope.

  • Protect cardholder data: APIs should avoid exposing full payment card information unless required and must appropriately protect cardholder data in transit and at rest.
  • Strong access controls: API access to payment systems should follow least-privilege principles, with individual accountability for administrative and privileged access.
  • Secure authentication: Credentials, tokens, API keys, and other authentication mechanisms should be protected against theft, reuse, and unauthorized disclosure.
  • API and application security: Public-facing applications must be protected against web-based attacks. PCI DSS 4.x requires an automated technical solution to detect and prevent web attacks for public-facing web applications.
  • Secure software development: APIs should be included in vulnerability management, code review, security testing, patching, and change-management processes.
  • Audit logging: API and application logs should provide sufficient information to determine who performed an action, what occurred, where and when it occurred, and how it was performed. PCI DSS specifically requires logging of administrative actions, access to audit logs, and invalid logical-access attempts.
  • Continuous monitoring: Organizations should monitor API endpoints for suspicious activity, unauthorized access, configuration changes, and attacks that could affect the cardholder data environment.
  • Scope management: Maintaining an accurate API inventory helps determine which APIs interact with cardholder data and therefore fall within PCI DSS scope.

3. HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) applies to covered entities and business associates handling electronic protected health information (ePHI). APIs that expose patient information, medical records, insurance data, or other ePHI must therefore support HIPAA’s administrative, physical, and technical safeguards.

  • Access controls: APIs should restrict ePHI access to authorized users, applications, and services according to their roles and legitimate business needs.
  • User and entity authentication: API consumers should be authenticated so the organization can verify the identity of the person or system requesting access to ePHI.
  • Audit controls: Systems containing or using ePHI must be capable of recording and examining activity, making API access and security logging an important compliance control.
  • Data integrity: APIs should include controls to prevent or detect unauthorized alteration or destruction of healthcare information.
  • Transmission security: ePHI transmitted through APIs must be appropriately protected against unauthorized access while moving across electronic networks.
  • Minimum necessary access: API responses should expose only the information required for a particular user, service, or workflow rather than complete patient records by default.
  • Business associate controls: Third-party APIs and service providers that create, receive, maintain, or transmit ePHI may need to be governed through Business Associate Agreements and appropriate security controls.
  • Incident investigation: API logs and monitoring should support investigation of unauthorized disclosures, credential misuse, abnormal data access, and potential breaches.

4. PSD2

The Revised Payment Services Directive (PSD2) established requirements for secure electronic payments and regulated access to payment accounts in the EU. It is particularly relevant to APIs because it enabled regulated third-party providers to access account information and initiate payments through interfaces provided by banks and other account-servicing payment service providers. The accompanying regulatory technical standards address Strong Customer Authentication (SCA) and common and secure communication.

  • Strong Customer Authentication: APIs supporting regulated payment activities must integrate authentication processes that satisfy PSD2’s SCA requirements where applicable.
  • Secure communication: Interfaces between banks, payment service providers, and regulated third parties must protect the confidentiality and integrity of transmitted information.
  • Third-party identification: APIs must enable regulated providers such as Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs) to identify themselves securely.
  • Consent and authorization: API access should correspond to the permissions authorized by the payment service user and should not provide broader access than the user has approved.
  • Protection of credentials: Sensitive authentication credentials must be protected against disclosure and misuse.
  • Availability and reliability: Dedicated interfaces used by third-party providers need to support reliable access to the payment functionality they are intended to provide.
  • API interoperability: PSD2’s secure-communication framework encourages standardized, secure interfaces that allow regulated payment participants to exchange data without relying on insecure credential-sharing techniques.
  • Monitoring and fraud detection: Payment APIs should support monitoring for unusual activity, authentication failures, unauthorized transactions, and other indicators of payment fraud or API abuse.

5. DORA

The Digital Operational Resilience Act (DORA) establishes ICT risk and operational resilience requirements for financial entities operating in the EU. APIs are relevant wherever they support financial services, integrate internal systems, connect third-party providers, or form part of a critical or important business function. DORA requires financial entities to maintain a documented ICT risk-management framework and continuously monitor the security and functioning of ICT systems.

  • API inventory and risk management: Organizations should understand which APIs support critical business services, what systems they connect to, and the risks associated with them.
  • Security and resilience: APIs should be designed to preserve the availability, authenticity, integrity, and confidentiality of data and services.
  • Continuous monitoring: API availability, authentication activity, anomalies, failures, and security events should be continuously monitored where appropriate.
  • Incident detection and logging: DORA requires processes to identify, track, log, categorize, classify, and respond to ICT-related incidents. API telemetry should therefore contribute to incident detection and investigation.
  • Incident response and reporting: Organizations need processes for identifying whether API-related outages, attacks, breaches, or disruptions constitute reportable ICT incidents.
  • Resilience testing: Critical APIs should be included in security testing, continuity testing, recovery exercises, and other digital operational resilience testing.
  • Third-party API risk: Dependencies on cloud platforms, SaaS providers, payment processors, identity providers, and other ICT third parties should be identified and governed.
  • Business continuity: APIs supporting critical functions should have appropriate availability, recovery, backup, failover, and dependency-management measures.

6. NIS2

The NIS2 Directive establishes cybersecurity risk-management and incident-reporting obligations for essential and important entities across numerous sectors in the EU. Although NIS2 does not prescribe an API-specific security architecture, APIs that form part of covered network and information systems must be included within the organization’s cybersecurity risk-management program.

  • Risk-based API security: APIs should be assessed as part of broader cybersecurity risk management, with protections proportionate to their exposure, criticality, data, and business function.
  • Access control: Strong authentication, authorization, least privilege, and identity-management practices should protect sensitive and administrative API functions.
  • Vulnerability management: Organizations should identify, remediate, and appropriately disclose vulnerabilities affecting APIs, gateways, applications, dependencies, and supporting infrastructure.
  • Encryption: Appropriate cryptographic protections should be used to secure sensitive API communications and information.
  • Incident detection: API traffic, authentication events, configuration changes, and abnormal activity should provide visibility into potential cybersecurity incidents.
  • Incident response and reporting: Organizations should ensure API-related incidents feed into the processes used to evaluate, escalate, and report significant cybersecurity incidents.
  • Supply-chain security: APIs connecting suppliers, service providers, cloud environments, and business partners should be assessed as part of third-party and supply-chain risk.
  • Business continuity: Critical API services should be included in backup, disaster recovery, crisis management, and operational resilience planning.

7. SOC 2 and ISO/IEC 27001

SOC 2 and ISO/IEC 27001 are commonly used to demonstrate that an organization has implemented a structured information-security control environment. SOC 2 evaluates controls relevant to the Trust Services Criteria—including security, availability, processing integrity, confidentiality, and privacy—while ISO/IEC 27001 provides requirements for establishing and continually improving an Information Security Management System (ISMS).

For APIs, these frameworks generally translate organizational security controls into repeatable API governance and operational practices.

  • API inventory and ownership: Organizations should maintain visibility into production APIs, associated data, owners, dependencies, and security responsibilities.
  • Authentication and authorization: Access to APIs should be governed through defined identity, credential, privilege, and access-review processes.
  • Change management: API deployments, configuration changes, schema modifications, and security-policy changes should follow controlled development and release processes.
  • Secure development: API development should incorporate secure coding, code review, vulnerability testing, dependency management, and remediation processes.
  • Logging and monitoring: API security events, administrative activity, failures, and anomalous access should be logged and monitored to support detection and investigation.
  • Availability and resilience: Organizations should implement appropriate redundancy, capacity management, backup, recovery, and continuity controls for APIs supporting important services.
  • Data classification and confidentiality: API security controls should reflect the sensitivity of the information being processed or exposed.
  • Evidence and auditability: API configuration records, access reviews, security tests, incident records, change approvals, and monitoring data can provide evidence that security controls are operating effectively.

8. EU AI Act and AI Agent APIs

The EU AI Act creates risk-based obligations for AI systems placed on the EU market or used within the EU. For organizations providing AI capabilities through APIs, the applicable requirements depend on their role and the type and risk classification of the AI system. High-risk AI systems are subject to requirements covering risk management, technical documentation, logging, transparency, human oversight, accuracy, robustness, and cybersecurity.

AI agents introduce an additional API-security concern because they may autonomously invoke APIs, access external data, trigger tools, or take actions on behalf of users. API governance therefore becomes part of both AI compliance and AI safety.

  • Traceability and logging: High-risk AI systems must technically support automatic event logging. APIs used to invoke models, agents, tools, or consequential actions should therefore provide traceable records of relevant activity.
  • Transparency: API documentation and application interfaces should provide sufficient information about the AI system’s intended purpose, capabilities, limitations, and appropriate use where required.
  • Human oversight: APIs supporting high-risk AI workflows should enable appropriate human review, intervention, approval, or termination of AI-driven processes.
  • Access and privilege controls for agents: AI agents should receive only the API permissions required for the task. Broad administrative scopes or unrestricted tool access can increase the impact of prompt injection, compromised credentials, or unintended autonomous actions.
  • Action authorization: Sensitive API actions—such as modifying records, moving money, deleting data, or communicating externally—should use appropriate authorization and, where necessary, human approval controls.
  • Input and output security: Organizations should consider malicious inputs, prompt injection, unsafe tool instructions, data leakage, and manipulation of information returned to or generated by AI systems.
  • Data governance: APIs used for training, retrieval, inference, evaluation, or agent memory should enforce applicable controls over data provenance, quality, privacy, retention, and permitted use.
  • Cybersecurity and robustness: AI APIs should be protected against attacks that could compromise system integrity, availability, confidentiality, or the reliability of AI outputs.
  • Technical documentation: Organizations may need to document AI architecture, API dependencies, model versions, data sources, security controls, intended uses, limitations, and relevant testing to demonstrate compliance.
  • Third-party model and tool governance: When AI agents call external models, APIs, plug-ins, or SaaS tools, organizations should understand those dependencies and ensure that third-party services do not bypass applicable security, privacy, or AI-governance requirements.

Common Use Cases for API Compliance

API compliance applies wherever APIs process regulated data, connect sensitive systems, or provide access to business-critical functions. Common use cases span financial services, healthcare, consumer applications, third-party integrations, and emerging AI systems.

  • Payment processing: APIs that transmit cardholder data must meet requirements such as PCI DSS for authentication, encryption, access control, secure development, logging, and vulnerability management.
  • Open banking and financial services: Banking APIs can fall under PSD2, DORA, and other financial regulations. Compliance controls help protect account information, authenticate users and third parties, monitor transactions, and maintain operational resilience.
  • Healthcare data exchange: APIs that provide access to electronic protected health information may be subject to HIPAA. Organizations need controls for authorization, encryption, audit logging, and limiting access to necessary patient information.
  • Personal data processing: APIs that collect or expose personal data may fall under GDPR and similar privacy regulations. Compliance includes controlling data access, minimizing collected information, supporting retention policies, and tracking how data moves between systems.
  • Third-party and partner integrations: APIs frequently exchange regulated data with SaaS providers, suppliers, and business partners. Compliance programs need to assess these connections, restrict third-party access, and monitor what sensitive data leaves the organization.
  • Cloud and microservices environments: Internal APIs can carry regulated data between microservices even when they are not internet-facing. Applying consistent identity, authorization, encryption, and logging controls helps prevent compliance gaps between services.
  • AI applications and agent APIs: AI systems and autonomous agents can retrieve sensitive data or invoke APIs that perform business actions. Compliance controls can restrict which APIs agents access, enforce permissions, record agent activity, and provide traceability for requirements such as those introduced by the EU AI Act.

Balancing API Security & Regulatory Compliance

It is essential to understand that while API security and compliance are two different practices, the lines have blurred considerably and are now interconnected. The regulations recognize this interconnectivity, and they have certain specific requirements that put the spotlight on security. For example, one of the critical requirements of PCI-DSS is that software should be developed securely.

Focus on software and system security during development minimizes vulnerabilities and reduces exploitation opportunities by criminals. This essentially means APIs must be secured as well.

Therefore, organizations must be aware of API risks that can interfere with their governance and compliance objectives. Some of these are defined by the OWASP API Top 10 list, including:

  • Broken Object Level Authorization
  • Broken User Authentication
  • Excessive Data Exposure
  • Lack of Resources and Rate Limiting
  • Broken Function Level Authorization
  • Security Misconfiguration

Where API Compliance Breaks Down

API compliance often fails because security and governance controls do not cover the full API inventory. Teams may secure documented production APIs while overlooking endpoints that were created outside standard development and review processes.

  • Shadow APIs: APIs deployed without formal registration, documentation, or security review can fall outside compliance controls. These endpoints may process regulated data without required authentication, logging, retention, or monitoring.
  • Third-party API gaps: Organizations often rely on SaaS platforms, payment providers, identity services, and other external APIs. Compliance can break down when teams do not understand what data those services receive, where it is stored, or which security controls the provider applies.
  • Zombie and deprecated APIs: Older API versions may remain accessible after teams stop maintaining them. These endpoints can use outdated authentication methods, expose unnecessary data, or bypass controls added to newer versions.
  • Incomplete API inventories: Compliance programs depend on knowing which APIs exist and what data they handle. Undiscovered endpoints make it difficult to apply consistent policies, assess risk, or produce reliable audit evidence.
  • Inconsistent access controls: APIs may enforce authentication but still allow users or services to access data beyond their intended permissions. Weak object-level and function-level authorization can create compliance violations even when identity controls are present.
  • Poor data visibility: Teams may not know which APIs transmit personal, payment, health, or other regulated data. Without data classification and flow mapping, sensitive information can move through systems that are outside the expected compliance scope.
  • Environment drift: Security settings can differ between development, staging, and production environments. An API that passes a compliance review in one environment may be deployed elsewhere with weaker authentication, logging, or configuration.
  • Insufficient monitoring and evidence: Organizations may have controls in place but lack the logs, alerts, and audit records needed to prove they are working. Compliance requires not only implementing controls, but also demonstrating that they are continuously enforced.

Key Factors to Consider for Developers and Security Practitioners

API compliance is an essential subset of a complete API strategy and requires a collaborative environment between developers and security teams to identify coding errors and potential vulnerabilities early in the development cycles. Even basic coding errors can leak sensitive information or provide unauthorized access to back-end resources that result in sensitive data exposure.

Two keys to ensuring API compliance are API security testing and regular API security posture management. API security testing should be part of the software development lifecycle to “shift left” and address security issues in the earlier stages of development. Then, API security posture management can ensure runtime issues are quickly discovered and addressed.

How Can Organizations Achieve API Compliance?

Build a Complete API Inventory

Organizations need an accurate inventory of internal, external, partner, and third-party APIs before they can apply compliance controls. API discovery should identify documented endpoints as well as shadow, deprecated, and zombie APIs that may otherwise remain outside governance processes.

The inventory should track details such as API owner, version, environment, authentication method, exposure, and lifecycle status. It should also show dependencies between APIs and the applications or services that consume them. This context helps teams determine which APIs are business-critical and who is responsible for remediation when compliance issues appear.

Because API environments change continuously, inventory should not be treated as a one-time exercise. Automated discovery can detect newly deployed endpoints and changes to existing APIs, helping compliance teams maintain an accurate view of their attack surface.

Map Each API to Applicable Regulations

Not every API is subject to the same compliance requirements. Organizations should map APIs to applicable regulations and frameworks based on the services they support, the jurisdictions involved, and the types of data they process.

This mapping allows teams to translate requirements from GDPR, PCI DSS, HIPAA, DORA, NIS2, and other frameworks into specific API controls. For example, an API that processes payment card data may require PCI DSS controls, while an API containing personal data from EU users may fall within GDPR requirements.

Organizations should document these mappings and update them when APIs, data flows, business processes, or regulatory requirements change. This creates a clear compliance scope and helps security teams determine which controls and audit evidence apply to each API.

Classify the Data Each API Handles

Organizations should identify and classify sensitive data that enters, leaves, or passes through each API. This includes personal data, payment card information, protected health information, authentication credentials, financial records, and other regulated or confidential data.

Classification should cover request and response payloads, headers, parameters, and other locations where sensitive information can appear. Teams should also understand where the data originates, which systems receive it, and whether APIs transfer it to third parties or across geographic boundaries.

Data classification helps determine which controls an API requires. It can also reveal excessive data exposure, such as sensitive fields returned by an endpoint that does not need them. Teams can then apply masking, encryption, access restrictions, data minimization, and retention policies according to the data’s sensitivity.

Enforce Controls at Runtime

Compliance policies need to remain effective when APIs receive real traffic. Runtime controls can enforce authentication, authorization, encryption, rate limits, schema validation, and restrictions on access to sensitive data.

Organizations should also monitor API activity for policy violations and suspicious behavior. This includes detecting abnormal access patterns, attempts to extract large amounts of sensitive data, misuse of valid credentials, and requests that violate expected API behavior.

Runtime enforcement complements design-time security checks because compliant code and configurations do not guarantee compliant behavior in production. Continuous monitoring can identify changes, attacks, and authorization failures that static testing may miss and provide the records needed for incident investigation.

Automate Evidence Collection for Audits

Audits require evidence that compliance controls are implemented and operating as intended. Organizations can automate the collection of API inventories, configuration records, access logs, policy violations, security test results, remediation history, and changes to API security controls.

Evidence should be linked to the relevant API, control, and compliance requirement where possible. This makes it easier for auditors and internal teams to verify that a required control exists, determine when it was tested, and review how identified issues were resolved.

Automated evidence collection reduces dependence on manual screenshots, spreadsheets, and point-in-time checks. It also creates a more consistent record between audits, allowing compliance teams to identify control failures earlier and demonstrate that API security policies are continuously enforced.

API Compliance with Cequence Security

As APIs proliferate across the enterprise network, organizations can no longer depend on a manual approach to API compliance. Instead, they must utilize a platform that specializes in API security that can automate many of the tasks required for security and compliance.

The Cequence Platform can automate many of the tasks required for API compliance with both internal guidelines and external regulations. Get started with a free API assessment today.

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